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). Prospective risk-adjusted capitalization is expected to be supported by good internal capital generation that is sufficient to absorb the company’s strategic plans. BIC’s balance sheet strength assessment also factors in the company’s conservative investment strategy, with the majority of investments held in cash, term deposits and fixed-income securities. The company partially mitigates volatility in risk-adjusted adjusted capitalisation by managing peak exposures from large risks and natural catastrophes through its reinsurance programme. Reinsurance counterparties are generally of good credit quality.

AM Best assesses BIC’s operating performance as adequate, with a five-year average return-on-equity ratio of 13.8% and a combined ratio of 94.3% (2019-2023). The company has generated consistent underwriting margins over recent years, supported in part by significant business expansion in personal accident and health insurance business, which is sourced through bancassurance. However, the net impact of Typhoon Yagi, which occurred in the third quarter of 2024, is expected to lead to greater volatility in underwriting performance over the near term. Nonetheless, the impact is expected to be mitigated by the company’s reinsurance programme. Furthermore, 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 market share has grown steadily in recent periods, supported by robust growth via its bancassurance channel, thanks to strong support from its banking parent, BIDV. The majority of the company’s gross premium written was sourced from Vietnam, with a small portion of premiums generated by its subsidiary in Laos. The company’s key lines of business are personal accident and health, property and fire, and motor insurance.

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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