AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Dhipaya Insurance Public Company Limited (Dhipaya) (Thailand).

The Credit Ratings reflect Dhipaya’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

The revision of the outlooks to stable from negative reflect an improvement in Dhipaya’s balance sheet strength assessment. The company’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), showed an improvement in 2023, mainly supported by a lower exposure to equity investment risk and an increase in shareholders’ equity.

Dhipaya’s balance sheet strength assessment is viewed as strong, supported by its strongest risk-adjusted capitalisation. The company benefits from strong financial flexibility as a group company of Dhipaya Group Holdings Public Company Limited (Dhipaya Group), which is a listed insurance holding company with access to capital markets. The company has a moderate risk investment strategy, given its notable allocation to equities and mutual funds. In addition, the company has a high reliance on reinsurance, although this is mitigated partially by the typically high credit quality of its reinsurance counterparties. The balance sheet strength assessment also factors in a neutral holding company impact arising from its ultimate ownership by Dhipaya Group.

Dhipaya’s operating performance is assessed as strong, with a five-year average return-on-equity ratio of 20.4% and combined ratio of 84.4% (2019-2023). Overall earnings have been supported by favourable underwriting performance and stable investment income. The underwriting performance improved in fiscal-year 2023, primarily due to better claims experience in health insurance, as the company was no longer affected by COVID-19 related claims in 2023. Dhipaya’s investment income, which comprises interest and dividend income, continues to remain supportive of overall earnings.

AM Best assesses Dhipaya’s business profile as neutral. The company has a strong presence in Thailand’s non-life market, ranking second with a market share of 12% in 2023, based on direct premium written. Dhipaya holds a dominant market position in several major segments, including fire insurance. The company’s business profile also benefits from its strong shareholder support through business referrals and access to extensive countrywide distribution networks.

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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