SINGAPORE, July 29 (Bernama-BUSINESS WIRE) -- A.M. Best has revised the outlooks to positive from stable and affirmed the financial strength rating of B+ (Good) and the issuer credit rating of “bbb-” of BIDV Insurance Corporation(BIC) (Vietnam). BIC is majority owned by the Bank for Investment and Development of Vietnam JSC (BIDV), one of the largest banks in Vietnam.
 
The revised outlooks reflect BIC’s strengthened risk-adjusted capitalization, following support from Fairfax Asia Limited (Fairfax Asia) as a strategic investor.
 
BIC’s risk-adjusted capitalization is supported by its low net and gross underwriting leverage. The company also has a conservative investment risk profile consisting mostly of term deposits. In terms of operating performance, BIC has maintained a better-than-average claims performance, and its net income has increased steadily for the past five years. BIC continues to benefit from its affiliation with BIDV in terms of branding, networking and customer outreach.
 
In 2015, Fairfax Asia acquired 35% of newly issued shares in BIC and became a strategic investor, substantially increasing BIC’s capital and surplus. Fairfax Asia also will bring technical assistance to areas such as underwriting, risk management and information technology, which could benefit BIC in terms of operational efficiency and business profile in the market.
 
Partially offsetting these positive rating factors is the company’s high expense ratio. Although the company is experiencing strong growth, it remains a small player and has yet to experience any improved economies of scale. Additionally, changes are expected to occur in the corporate structure that could result in a redistribution of capital.
 
Positive rating actions could result from a continued improvement in the company’s operating performance and the development of a capital allocation policy that would result in strong risk-adjusted capitalization.
 
Negative rating actions could result from a decline in the company’s risk-adjusted capitalization due to material deterioration in operating performance.
 
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
 
This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.
 
A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
 
Copyright © 2016 by A.M. Best Rating Services, Inc. ALL RIGHTS RESERVED.
 
Contacts
A.M. Best
Wesley Chia, +65 6589 8400 ext. 213
Associate Financial Analyst
wesley.chia@ambest.com
or
Chi-Yeung Lok, +65 6589 8400 ext. 211
Senior Financial Analyst
chi-yeung.lok@ambest.com
or
Christopher Sharkey, +1-908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1-908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Source: A.M. Best
 
View this news release online at:
http://www.businesswire.com/news/home/20160728006270/en
 
--BERNAMA