The ratings reflect BIC’s good operating performance and strong risk-adjusted capitalization, which is supported by its low underwriting leverage. In terms of underwriting performance, BIC has performed well compared with its peers, especially in its loss ratio. Nonetheless, the company’s underwriting profit remains small in absolute terms.

The company’s investment portfolio is conservative, consisting mostly of cash and deposits. The company also receives a steady stream of interest income from these cash and deposits, which has supported overall results.

BIC is majority owned by the Bank for Investment and Development of Vietnam JSC (BIDV), one of the largest banks in Vietnam, and benefits from this affiliation in terms of branding, networking and customer outreach. Fairfax Financial Holdings Limited (Fairfax), the company’s second-largest shareholder, provides BIC with technical support in areas such as product development and investments.

Offsetting these positive rating factors is a decline in the company’s underwriting margin due to increasing competition in the market. Additionally, the company’s technology expenditures are expected to increase in the coming years.

Positive rating actions could occur if BIC can demonstrate a good trend in underwriting performance while growing its business profile.

Negative rating actions could result from material deterioration in its operating performance or risk-adjusted capitalization.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

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