HONG KONG--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Bangkok Insurance Public Company Limited (BKI) (Thailand). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect BKI’s sound risk-adjusted capitalization that is supported by a conservative level of underwriting leverage, favorable operating performance and solid market position in Thailand’s non-life insurance market.
BKI generates its premiums via a diversified distribution channel, including the distribution support from its related company, Bangkok Bank, one of Thailand’s largest banks. BKI continued to report favorable underwriting performance after the Thai flood losses in 2011. Investment performance is supported mainly by a stable stream of dividend income from equity investments. A.M. Best expects that BKI will continue to focus on risk selection and a prudent reinsurance arrangement to safeguard its underwriting profitability.
Offsetting rating factors include BKI’s significant investment concentration in listed equities, which comprised more than half of its invested portfolio and represented a sizeable proportion relative to its capital and surplus. As a result, the company’s capitalization level could be impacted materially by potentially adverse equity market conditions.
While positive rating actions are unlikely in the near term, negative rating pressure could result from material deterioration in BKI’s risk-adjusted capitalization due to large operating losses or material adverse movement on its equity investments.
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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