AM Best Affirms Credit Ratings of Allianz Ayudhya General Insurance Public Company Limited

SINGAPORE--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Allianz Ayudhya General Insurance Public Company Limited (AAGI) (Thailand). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect AAGI’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. In addition, AAGI benefits from rating enhancement from Allianz SE (Allianz group).

AAGI’s balance sheet strength assessment is assessed as strong, supported by its very strong level of risk-adjusted capitalisation at year-end 2024, as measured by Best’s Capital Adequacy Ratio (BCAR). AAGI’s risk-adjusted capitalisation remains sensitive to the company’s ultimate capital distribution levels and earnings retention; however, it is expected to remain at least at the strong level over the medium term. The company benefits from strong financial flexibility with access to capital markets through its listed parent holding company, Allianz Ayudhya Capital Public Company Limited [SET: AYUD]. AM Best views the company’s investment strategy as conservative, with the majority of its investments allocated to cash, deposits and high-quality bonds. The company has a moderate reliance on reinsurance to support its underwriting capacity and manage its exposure to catastrophic events. However, this risk is partially mitigated by the high credit quality of the reinsurance panel.

AAGI’s operating performance is assessed as adequate, with a return-on-equity ratio of 2.6% in 2024 (2023: 8.2%). In 2024, AAGI reported a combined ratio of 101.1%, compared with 96.7% in 2023, primarily due to flood losses in northern Thailand and higher claims levels from its health insurance segment. However, this was partially mitigated by an improved loss experience in motor insurance, resulting from remedial actions taken by the company. AAGI’s operating performance remained profitable in the first half of 2025, despite some impact from the Thailand earthquake in March 2025. The company’s stable investment income, which is comprised of mainly interest income, continues to support overall profitability. Prospectively, AM Best anticipates that AAGI will sustain an adequate operating performance level, supported by its growth strategy while maintaining prudent underwriting and pricing discipline.

AM Best assesses AAGI’s business profile as limited. AAGI is a non-life insurer operating in Thailand and ranks as the ninth largest general insurer, with a market share of 3.7%, based on direct premiums written in 2024. The company’s underwriting portfolio is well-diversified by line of business and distribution channels. However, it has limited geographic diversification as it only offers its products in Thailand. The amalgamation with Aetna Health Insurance (Thailand) Public Company Limited in 2023 provided AAGI with scale and diversification, allowing it to expand its presence in the Thai health insurance market. The company is projected to generate robust premium growth over the medium term, primarily driven by the strengthening of its distribution channels and focusing on the development of its health and commercial products.

The rating enhancement from Allianz SE reflects the explicit and implicit support it receives from the group. AAGI receives explicit support in the form of reinsurance from the Allianz group. In addition, the company benefits from implicit support in areas such as corporate governance and investment management services, as well as access to shared resources and services across various business functions. Although AAGI’s operations account for a small portion of the group's consolidated revenue, the company is considered strategically important to the group’s expansion strategy.

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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