Market Overview

A.M. Best Upgrades Credit Ratings of BIDV Insurance Corporation


A.M. Best has upgraded the Financial Strength Rating to B++
(Good) from B+ (Good) and the Long-Term Issuer Credit Rating to "bbb"
from "bbb-" of BIDV Insurance Corporation (BIC) (Vietnam). The
outlook of these Credit Ratings (ratings) has been revised to stable
from positive.

The ratings reflect BIC's balance sheet strength, which A.M. Best
categorizes as strong, as well as its adequate operating performance,
neutral business profile and appropriate enterprise risk management.

The rating upgrades reflect the stability of BIC's capitalization, along
with the company's low underwriting leverage and conservative investment
portfolio. Plans to redistribute capital across the company's corporate
structure also have been postponed indefinitely. BIC's underwriting
leverage is low compared with its peers in Vietnam's non-life market,
and the company's premium growth remains modest. BIC's investment
portfolio consists mostly of cash and deposits.

The company's underwriting performance remains generally in line with
the market, which has been experiencing worsening underwriting margins
due to intense competition. The company has a relatively better loss
ratio, though this is offset by a higher expense ratio. BIC's combined
ratio is high and has been on a gradual upward trend.

BIC is majority owned by the Bank for Investment and Development of
Vietnam JSC
, one of the largest banks in Vietnam, and benefits from
this affiliation in terms of customer outreach. Fairfax Financial
Holdings Limited
, the company's second-largest shareholder, provides
BIC with technical support in areas such as information technology and
product development.

An offsetting rating factor is the above-mentioned high expense ratio.
BIC remains a small player in Vietnam's non-life market and has yet to
experience economies of scale. Competition in the market remains fierce,
and underwriting margins will continue to be under pressure.

BIC is unlikely to see further positive rating actions in the near term.
Negative rating actions could result from continued deterioration in the
company's operating performance or from a material decline in
risk-adjusted capitalization.

Ratings are communicated to rated entities prior to publication.
Unless stated otherwise, the ratings were not amended subsequent to that

This press release relates to Credit Ratings that have been published
on A.M. Best's website. For all rating information relating to the
release and pertinent disclosures, including details of the office
responsible for issuing each of the individual ratings referenced in
this release, please see A.M. Best's
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
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. For information on the proper media
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