AM Best confirms A credit rating for PVI Insurance Corporation

Recently, financial credit rating agency AM Best has affirmed the financial strength rating of A- (excellent) and the long-term credit rating of the Issuer at “a-” (excellent) and the National Scope Rating (NSR) of aaa.VN (excellent) for PVI Insurance Corporation (PVI Insurance). The outlook for these credit ratings is stable.

The rating reflects PVI Insurance's financial strength, which AM Best considers to be very strong, with very good operating results, a stable business system and an appropriate enterprise risk management (ERM) system. The rating takes into account the positive impact of the rating of HDI Group (HDI VaG) - a major shareholder of PVI (parent company of PVI Insurance).

PVI Insurance's financial strength is supported by risk-adjusted capitalization through increased charter capital and is assessed by AM Best (based on the BCAR capital adequacy rating model) as expected to remain at its strongest level over the medium term. PVI Insurance has good financial flexibility due to HDI VaG's majority ownership. AM Best assesses the company's investment portfolio as having a medium level of risk, most of which is allocated to term deposits, the rest invested in corporate bonds, associates, and investment trusts. PVI Insurance has a high profit payout ratio to the parent company, reinsurance is a strength to support property, engineering, and energy insurance activities.

AM Best assesses PVI Insurance’s operating performance as very good, as evidenced by a five-year average return on equity (ROE) of 17.1% (2020–2024). Despite the impact of Typhoon Yagi on its insurance business, the company is expected to achieve a positive ROE of 14% in 2024. Its insurance business is expected to remain strong over the medium term across both industrial, commercial and retail insurance. Investment income, mainly from interest and dividends, is expected to continue to be an important contributor to PVI Insurance’s overall profitability.

Regarding PVI Insurance's business operations, AM Best assesses it as stable. The company is the largest non-life insurer in Vietnam in terms of original insurance revenue in 2023 and continues to increase its market share. PVI Insurance has a strong position in the market in the fields of commercial and industrial business including energy, property, engineering, aviation and marine, partly thanks to the support from the Vietnam Oil and Gas Group (PVN), one of the largest economic groups in Vietnam. HDI VaG has supported PVI Insurance to improve its technical capacity and insurance service quality, contributing to strengthening the company's position in the field of industrial risk insurance in the region.

Reinsurance business expansion has been a major contributor to recent growth, however, prudent risk management needs to be monitored and evaluated further.

As the number 1 non-life insurance company in Vietnam, PVI Insurance is the first and only domestic company to be rated A- (excellent) for financial strength by AM Best for three consecutive years. In 2024, PVI Insurance will continue to affirm its position by becoming the first non-life insurance company in Vietnam to surpass the revenue milestone of VND 20,000 billion. Looking forward to 2025, the company aims to reach the milestone of USD 1 billion in revenue to celebrate the 30th anniversary of PVI's establishment.

Bui Huyen