AM Best Upgrades Long-Term Issuer Credit Rating of Hanoi Reinsurance Joint Stock Corporation

SINGAPORE--(BUSINESS WIRE)--AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” (Good) from “bbb” (Good) and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Vietnam National Scale Rating (NSR) of aaa.VN (Exceptional) of Hanoi Reinsurance Joint Stock Corporation (Hanoi Re). In addition, AM Best has revised the outlook of the Long-Term ICR to stable from positive, while the outlook of the FSR and the NSR is stable.

The Credit Ratings (ratings) reflect Hanoi Re’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management. The ratings also factor in rating enhancement from Hanoi Re’s ultimate parent, HDI Haftpflichtverband der Deutschen Industrie V.a.G.

The upgrade of the Long-Term ICR reflects Hanoi Re’s strengthened balance sheet strength fundamentals in recent years. Hanoi Re’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is expected to remain at the strongest level over the medium term. Capital requirements have increased in fiscal year (FY) 2025 following strong business growth and higher investment risk, though the company’s capital adequacy remains robust, nonetheless. The company’s investment portfolio is of moderate risk, with investments mainly allocated toward cash and term deposits, and the remainder held in non-rated corporate bonds and affiliated private equity investments. The company’s high retrocession dependence to support its underwriting of large commercial risks is viewed as an offsetting factor, though reinsurance counterparty risk is mitigated partially by the company’s quality panel of retrocession counterparties.

AM Best views the company’s operating performance as strong, as evidenced by its five-year average return-on-equity ratio of 14.4% (FY 2021-2025). Operating earnings improved in FY 2025, supported primarily by improvements in underwriting performance. Underwriting performance showed a recovery in FY 2025 supported by favourable loss reserve development, reduction in management expenses and premium rate increases. Investment returns, consisting mainly of interest and dividend income, is expected to remain a key contributor to the company’s overall earnings.

Hanoi Re is one of the two domestic reinsurers in Vietnam, with a significant volume of business sourced from its affiliated company, PVI Insurance Corporation. The company has a moderate underwriting risk given its sizeable exposure to catastrophe-exposed property and engineering lines, although potential losses are mitigated partially by catastrophe retrocession.

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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