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

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

PVI Insurance’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 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 assesses PVI Insurance’s operating performance as strong, supported by its five-year average return-on-equity ratio of 17.9% (2019-2023). PVI Insurance continued to deliver robust underwriting profits in 2023 and achieved a combined ratio of 92.7%. Underwriting performance is expected to remain robust over the medium term supported by profitable results in commercial and industrial lines of business. Investment returns, consisting mainly of interest and dividend income, is expected to remain as a key contributor to the company’s overall earnings.

AM Best assesses PVI Insurance’s business profile as neutral. The company became the largest non-life insurer in Vietnam based on 2022 direct premiums and it continues to grow its market share. The company 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 group, 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.

AM Best assesses PVI Insurance’s ERM approach as appropriate given the size and complexity of its current operations. PVI Insurance benefits from risk management and governance support from HDI V.a.G.

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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