Vietnam National Reinsurance Corporation (VINARE) has a very strong balance sheet, strong operating performance, a neutral business profile and appropriate enterprise risk management, notes A.M. Best.
In addition, VINARE’s risk-adjusted capitalisation is supported by its low net and gross underwriting leverage. The company’s investment portfolio is conservative, with a majority of its assets invested in cash and deposits.
VINARE has maintained a good operating performance throughout the past five years, driven by underwriting and investment activities. The company achieved an average combined ratio of approximately 87% from 2013 to 2017, lower than many direct insurers in Vietnam and its peers across the region, notes the international rating agency.
VINARE continues to receive support from its shareholders, namely the State Capital Investment Corporation, Swiss Re and other direct insurers in Vietnam, which are also its cedants. Swiss Re, VINARE’s second largest shareholder, provides the company with technical support and modeling capabilities.
An offsetting rating factor is the company’s low earnings retention, points out A.M.Best. This could impede capital growth relative to its cedants, which are experiencing capital increases from organic growth and foreign investment. In addition, Vietnam continues to attract international and regional reinsurance capacity.
A.M. Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” of VINARE. The outlook of these Credit Ratings (ratings) is stable.
Established in September 1994, VINARE was the first reinsurer in Vietnam’s insurance market.
By end-2017, VINARE had paid-up capital of VND1.3 trillion ($57.1 million), equity capital of VND2.6 trillion ($114.2 million) and assets worth VND6.2 trillion ($272.3 million).