Reuters logo
Fitch Affirms Muang Thai Life at 'BBB+'; Outlook Stable
December 9, 2016 / 11:14 AM / a year ago

Fitch Affirms Muang Thai Life at 'BBB+'; Outlook Stable

(The following statement was released by the rating agency) BANGKOK/SINGAPORE, December 09 (Fitch) Fitch Ratings has affirmed Muang Thai Life Assurance Public Company Limited's (MTL) International and National Insurer Financial Strength (IFS) ratings at 'BBB+' and 'AAA(tha)', respectively. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect MTL's strong capital position, sustained solid financial performance, robust market position and acceptable investment risks. The ratings also reflect support from its major shareholders, KASIKORNBANK Public Company Limited (KBANK; Issuer Default Rating: BBB+/Stable), Thailand's fourth-largest bank by total assets, and Ageas Insurance International N.V. (Ageas; IDR: A/Stable). The company benefits from exclusive bancassurance distribution by KBANK and receives technical and operational support from Ageas. MTL is graded 'Strong' on Fitch Ratings' Prism Factor-Based Model, based on end-2015 results, which is one level lower than the previous grade based on its 2014 financial results. The reduction was mainly due to the increase in insurance liabilities outpacing returns in a lower interest-rate environment. Nevertheless, the company is still well-capitalised and has no external debt. Its capital ratio based on risk-based capital (RBC) was 443% at end-2Q16 and 449% at end-2015, which were well above the regulatory minimum of 140%. Fitch expects MTL to maintain its sound financial performance with its vigilant pricing policy and good investment income. The company's profitability has improved consistently, with three-year (2013-2015) compound annual growth rate of gross premiums at 20.8%, which beat the industry's three-year CAGR of 10.2%. In addition, the average pre-tax return on assets for 2013-2015 of 3.8% compares well with its regional peers. MTL is Thailand's second-largest life insurer by total premiums, with an 18.6% market share at end-2Q16. The company also has the highest market share in new business premiums written with 22.9% in the same period, supported by its extensive bancassurance distribution. MTL is the market leader in premiums written through bancassurance channels with a 27% market share in 2015. MTL maintains its conservative investment portfolio, mainly fixed-income instruments, which accounted for 85% of invested assets at end-2Q16. The majority of its fixed-income investments are issued by governments and state enterprises. Investments in equities and trusts made up 9% of invested assets at end-2Q16. RATING SENSITIVITIES Key triggers that could lead to a downgrade include a drop in MTL's RBC ratio to below 250% for an extended period or if its capitalisation, as measured by Fitch's Prism FBM, deteriorates. In addition, a decline in profitability as reflected in MTL's pre-tax return on assets sustained at below 1% could trigger a rating downgrade. If Thailand's Long-Term Local-Currency IDR of 'BBB+' with a Stable Outlook were downgraded, MTL's IFS rating would likely be lowered. An upgrade is unlikely in the near term as MTL's International IFS rating is at the same level as Thailand's Long-Term Local-Currency IDR. MTL's National IFS rating is already at the highest possible level. Contact: Primary Analysts Siew Wai Wan (International rating) Senior Director +65 6796 7217 Fitch Ratings Singapore Pte Ltd One Raffles Quay, South Tower #22-11 Singapore 048583 Patchara Sarayudh (National rating) Director +662 108 0152 Fitch Ratings (Thailand) Limited 57 Wireless Road Lumpini, Patumwan Bangkok 10330 Secondary Analyst Terrence Wong (International rating) Director +852 2263 9920 Siew Wai Wan (National rating) Senior Director +65 6796 7217 Committee Chairperson Jeffrey Liew Senior Director +852 2263 9939 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: Disclosure: Muang Thai Life Assurance Public Company Limited (in which KBANK holds a 38.3% economic interest) owns 10% of the shares in Fitch Ratings (Thailand) Ltd. Kasikorn Asset Management Company Limited (in which KBANK holds a 100% stake) owns 10% of the shares in Fitch Ratings (Thailand) Ltd. No shareholder, other than Fitch Ratings Limited, is involved in the day-to-day operations of, or credit rating reviews undertaken by Fitch Ratings (Thailand) Ltd. Note to Editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(tha)' for National ratings in Thailand. Specific letter grades are not therefore internationally comparable. Additional information is available at Applicable Criteria Insurance Rating Methodology (pub. 15 Sep 2016) here National Scale Ratings Criteria (pub. 30 Oct 2013) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here _id=1016201 Solicitation Status here Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2016 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch's factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch's ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided "as is" without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below