AM Best Affirms Vietnam’s BIC Credit Ratings With Stable Outlook
KUALA LUMPUR, Sept 25 (Bernama) -- Global credit rating agency, 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).
The outlook of these credit ratings (ratings) is stable, reflecting 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.
In a statement, AM Best said the ratings also factor in the neutral impact from BIC’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. The company benefits from good internal capital generation, supported by consistent earnings and a low-to-moderate dividend payout ratio.
BIC also maintains a conservative investment strategy, with the majority of investments held in cash, term deposits and fixed-income securities. Its exposure to large risks and natural catastrophes is partially mitigated through its reinsurance programme, with reinsurance counterparties generally of good credit quality.
AM Best assesses BIC’s operating performance as adequate. The company reported a five-year average return on equity ratio of 16.0 per cent from 2021 to 2025, supported in part by consistent underwriting margins in recent years.
The underwriting profits are mainly attributable to its personal accident and health insurance business, sourced through bancassurance, while stable interest income from term deposits and fixed-income holdings is expected to remain an important contributor to overall earnings.
AM Best also assesses BIC’s business profile as neutral. Its business acquisition benefits from common branding and strong distribution channel support from BIDV, while premiums are sourced mainly from Vietnam. The company is also diversifying its portfolio through subsidiaries in Cambodia and Laos.
BIC’s risk management framework and capabilities benefit from technical support, expertise and oversight provided by BIDV, as well as a strategic relationship with its minority shareholder, Fairfax Asia Limited.
-- BERNAMA