AM Best Affirms Credit Ratings of Petrolimex Insurance Corporation

SINGAPORE--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of B++ (Good), the Long-Term Issuer Credit Rating of “bbb” (Good), and the Vietnam National Scale Rating (NSR) of aaa.VN (Exceptional) of Petrolimex Insurance Corporation (PJICO) (Vietnam). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect PJICO’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

PJICO’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which is expected to remain at the strongest level over the medium term, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s prospective risk-adjusted capitalisation is expected to be supported by good internal capital generation, which takes into account its planned business growth. PJICO maintains a prudent investment strategy, with a majority of its investments held in cash and term deposits. The company has a moderate reliance on reinsurance to support its underwriting capacity for large property and engineering risks, as well as to manage accumulation risks and catastrophe exposure. The credit risk associated with this dependence is partly mitigated by the good credit quality of PJICO’s reinsurance panel.

AM Best assesses PJICO’s operating performance as adequate, as evidenced by a five-year (2020-2024) weighted average return-on-equity of 12.6%. The company’s overall earnings remain driven by a stable stream of investment income. The organisation’s elevated expense ratio continues to be an offsetting factor in its operating performance assessment.

AM Best assesses PJICO’s business profile as neutral. PJICO is a non-life insurer based in Vietnam, with gross premiums written of VND 4.6 trillion (USD 184 million) in 2024, equating to approximately 6% of the domestic market share. The company’s premium mix is moderately diversified with its key business lines being motor, accident and health, property and marine cargo. PJICO has a vast distribution network, including agency and direct channels. The company’s business profile benefits from its common branding and preferential access to cargo business arising from its largest non-majority shareholder, Vietnam National Petroleum Group.

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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