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SINGAPORE–(BUSINESS WIRE)–AM 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 balance sheet strength, which AM Best
categorizes as very strong, as well as its strong operating performance,
neutral business profile and appropriate enterprise risk management
(ERM).

BKI’s balance sheet strength assessment is underpinned by risk-adjusted
capitalization that remains at the very strong level, as measured by
Best’s Capital Adequacy Ratio (BCAR). Capital adequacy is supported by
the company’s low net underwriting leverage, albeit partially offset by
a high-risk investment portfolio, which includes large and concentrated
holdings of domestic equities. While the company has exhibited an
elevated dividend payout ratio over recent years, retained earnings have
remained robust and sufficient to support business growth. Other balance
sheet considerations include the company’s moderate dependence on
reinsurance to manage its exposure to catastrophe events, accumulations
and large single risks.

AM Best views the company’s operating performance as strong, as
evidenced by a five-year average combined ratio of 86.6% and operating
ratio of 77.2% (2014-2018). BKI’s underwriting performance has exhibited
a high degree of stability over the past five years, as well as
comparing favorably with local and regional peers. Prospectively, AM
Best expects the company’s operating performance to remain at a strong
level, supported by a robust balance of underwriting and investment
earnings. AM Best expects the company to continue to exhibit a strong
underwriting discipline with a focus on profitable growth.

BKI’s business profile is assessed as neutral. The company is the
third-largest non-life insurer in Thailand with direct written premiums
of THB 16.7 billion (USD 516 million) in 2018, equivalent to a 7% market
share. The company’s portfolio is diversified moderately by line of
business; however, almost all business originates from Thailand with a
high geographical concentration toward the city of Bangkok.

AM Best considers the company’s ERM framework to be appropriate given
the size and complexity of its operations. The company’s risk management
capabilities are assessed typically to be adequate for the profile of
key risks.

Ratings are communicated to rated entities prior to publication.
Unless stated otherwise, the ratings were not amended subsequent to that
communication.

This press release relates to Credit Ratings that have been published
on AM Best’s website. For all rating information relating to the release
and pertinent disclosures, including details of the office responsible
for issuing each of the individual ratings referenced in this release,
please see AM Best’s
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best’s Credit Ratings
. For information on the proper media
use of Best’s Credit Ratings and AM Best press releases, please view
Guide
for Media – Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases
.

AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit
www.ambest.com
for more information.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

Contacts

Yuan Tian
Senior Financial Analyst
+65 6303
5016

[email protected]

Christopher
Sharkey

Manager, Public Relations
+1 908 439
2200, ext. 5159

[email protected]

Myles
Gould

Associate Director, Analytics
+65 6303 5020
[email protected]

Jim
Peavy

Director, Public Relations
+1 908 439
2200, ext. 5644

[email protected]