AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of 'bbb' (Good) of
Additionally, AM Best has assigned the Vietnam National Scale Rating (NSR) of aaa.VN (Exceptional) to BMI. The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect BMI'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 majority ownership by the
BMI's balance sheet strength is underpinned by its risk-adjusted capitalisation, as measured by Best's Capital Adequacy Ratio (BCAR), which is expected to remain at the strongest level over the near to medium term. Notwithstanding, the company's regulatory solvency ratio has shown a decreasing trend in recent years due to business growth that exceeded the rate of capital generation. AM Best views BMI's investment portfolio to be of moderate risk, with the majority of investments allocated toward term deposits and the remainder held in non-rated corporate bonds, equity investments including a joint venture and real estate. Further offsetting factors include BMI's basic approach to asset liability management, despite some exposure to longer-duration products within its business mix, as well as its moderate dependence on reinsurance to support the underwriting of large limit risks, which helps to manage catastrophe exposure accumulation.
AM Best views the company's operating performance as adequate, supported by its five-year average return-on-equity ratio of 10.1% (2018-2022). BMI has consistently generated underwriting profits in recent years, although its high expense ratio remains an offsetting factor to its underwriting performance. Underwriting performance improved in fiscal-year 2022, benefitting from more favourable loss experience in the company's fire, property and casualty lines of business. BMI continued to achieve technical profitability in the first nine months of 2023, albeit with thinner margins given the increased losses from health and motor insurance. Investment returns remain a stable contributor to overall earnings with a five-year average net investment return (including gains/losses) of 5.5% (2018-2022).
AM Best views BMI's business profile as neutral. BMI is ranked as the fourth-largest non-life insurer in
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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