AM Best affirms credit ratings of Vietnam's PVI Insurance Corporation

AM Best has affirmed the Financial Strength Rating of A- (Excellent), the Long-Term Issuer Credit Rating of “a-” (Excellent), and the Vietnam National Scale Rating (NSR) of aaa.VN (Exceptional) for PVI Insurance Corporation (PVI Insurance). The outlook of these credit ratings is stable.

PVI Insurance has been rated A- (Excellent) by AM Best for three consecutive years. It is the number 1 non-life insurer in Vietnam in terms of profit, capital scale, revenue, and market share.

The ratings reflect the company's balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile, and appropriate enterprise risk management.

The ratings also factor in rating enhancement from PVI Insurance’s ultimate parent, HDI Haftpflichtverband der Deutschen Industrie V.a.G. (HDI V.a.G.).

The insurer’s balance sheet strength is underpinned by its risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which is expected to remain at the strongest level over the medium term. PVI Insurance benefits from good financial flexibility, given its majority ownership by HDI V.a.G..

AM Best views the company’s investment portfolio to be of moderate risk, with the majority of investments allocated toward cash and term deposits and the remainder held in non-rated corporate bonds, affiliated private equity investments, and real estate.

Offsetting factors include the company’s high dividend payout ratio and high reinsurance dependence to support the underwriting of large commercial property, engineering and energy risks.

AM Best views PVI Insurance’s operating performance as strong, supported by its five-year average return-on-equity ratio of 17.1% (2020-2024).

While underwriting results were affected by super typhoon Yagi, the overall impact was limited, and the company continued to generate favorable operating earnings, reporting a return on equity ratio of 14% in 2024.

Underwriting performance is expected to remain robust over the medium term, supported by profitable results in both commercial and retail lines of business. Investment income, consisting mainly of interest and dividend incomes, is expected to remain as a key contributor to the company’s overall earnings.

AM Best views PVI Insurance’s business profile as neutral. The company is the largest non-life insurer in Vietnam based on 2023 direct premiums and it continues to grow its market share.

It has a strong market position in commercial and industrial lines of business, including energy, property, engineering, aviation, and marine insurance, as supported by its affiliation with the Petrovietnam (PVN), one of the largest state-owned oil and gas corporations in Vietnam.

Support from HDI V.a.G. has enhanced PVI Insurance's technical expertise and service offerings, strengthening its position in the regional industrial risks’ insurance segment.

Business expansion in inwards reinsurance was a major contributor to recent growth, although prudent accumulation management remains an area to be monitored.

AM Best is a global credit rating agency, news publisher, and data analytics provider specializing in the insurance industry.