HONG KONG--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of B+ (Good) and the issuer credit rating of “bbb-” of PVI Reinsurance Joint-stock Corporation (PVI Re) (Vietnam). The outlook for both ratings is positive.
The ratings reflect PVI Re’s favorable risk-adjusted capitalization, profitable operating results and support from the major shareholders of PVI Holdings.
PVI Re’s risk-adjusted capitalization level, as measured by Best’s Capital Adequacy Ratio (BCAR), is adequate to support its current ratings. Apart from the capital injection from new shareholders in 2013, steady capital growth was mainly contributed from the company’s consistently profitable underwriting and investment results. PVI Re chiefly underwrites commercial business where it has underwriting expertise, such as energy and property, and has generated satisfactory performance. PVI Re’s prudent investment strategy has also provided a reliable income source for the company since inception.
PVI Re has benefited from the support from the major shareholders of PVI Holdings, Vietnam National Oil & Gas Group (PetroVietnam or PVN), Talanx AG (Talanx) and Oman Investment Fund (OIF), which also support PVI Holdings and its subsidiaries in various areas. PVN provides branding awareness and a client network, while Talanx and OIF provide support through accessing into international markets and transferring technical knowledge.
Offsetting rating factors include PVI Re’s small capital size as compared with other peer reinsurers in the Asia Pacific region, as well as the competitive landscape of the Vietnamese and regional reinsurance markets.
Future upward rating actions could occur if PVI Re continues to increase its capital level according to its business plan, strengthen its presence in the Vietnamese reinsurance market and demonstrate the capability to achieve consistently favorable operating performance. Conversely, negative rating actions could occur if the company’s risk-adjusted capitalization declines materially resulting from significant deterioration in operating performance.
The methodology used in determining these interactive ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
- Catastrophe Analysis in A.M. Best Ratings
- Evaluating Country Risk
- Measuring Transfer and Convertibility Risk
- Rating Members of Insurance Groups
- Rating New Company Formations
- Risk Management and the Rating Process for Insurance Companies
- Understanding Universal BCAR
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
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