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 of aaa.VN (Exceptional) of BIDV Insurance Joint Stock Corporation (BIC) (Vietnam). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect BIC’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. The ratings also factor in a neutral impact from the company’s ultimate corporate parent, Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV).

BIC’s balance sheet strength assessment is underpinned by the strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR). BIC benefits from good internal capital generation, supported by consistent earnings and a low to moderate dividend payout ratio. The company has a conservative investment strategy, with the majority of investments held in cash, term deposits and fixed-income securities. In addition, BIC’s exposure to large risks and natural catastrophes is mitigated partially through its reinsurance programme, whereby its reinsurance counterparties are generally of good credit quality.

AM Best assesses BIC’s operating performance as adequate. BIC reported a five-year average return-on-equity ratio of 15.2% (2020-2024), supported in part by consistent underwriting margins over recent years. In addition, the company’s stable stream of interest income from term deposits and fixed-income holdings is expected to remain as an important contributor to its overall earnings.

AM Best assesses BIC’s business profile as neutral. The company’s business acquisition benefits from its common branding, and strong distribution channel support from its ultimate corporate parent, BIDV. Premiums are sourced mainly from Vietnam, although BIC is diversifying its portfolio through its subsidiaries in Cambodia and Laos.

BIC’s risk management framework and capabilities benefit from a level of technical support, expertise and oversight provided by BIDV, as well as from a strategic relationship with its minority interest shareholder, Fairfax Asia Limited.

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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