Fitch Upgrades Muang Thai Life to ‘AA+(tha)’; Outlook Stable

Stocks and Financial Services Press Releases Thursday December 15, 2011 08:19
Bangkok--15 Dec--Fitch Ratings

Fitch Ratings has upgraded Muang Thai Life Assurance Company Limited’s (MTL) National Insurer Financial Strength (IFS) Rating to ‘AA+(tha)’ from ‘AA(tha)’. The Outlook is Stable. At the same time, the International Insurer Financial Strength (IFS) Rating has been affirmed at ‘BBB+’ with Stable Outlook.

The upgrade reflects MTL’s sustained improvements in financial performance, its strong franchise and market position, and prudent capitalisation. The ratings also take into account continuous operational support provided by MTL’s shareholders, Ageas Insurance International N.V. (Ageas; IDR ‘BBB+’/Stable) and Kasikornbank (KBANK: IDR ‘BBB+’/Stable), Thailand’s fourth- largest bank.

For 9M11, revenue increased 32% yoy to THB32bn and the return on average assets (ROAA) remained stable at an annualised rate of 2.5% (2010: 2.6%). Fitch expects the revenue growth momentum to continue in 2012, supported by effective multi-channel distribution, KBANK’s extensive bancassurance network and its strong agency force. However, investment yields could decline due to increased capital market volatility. For Q411, Thailand’s severe floods are likely to have resulted in business disruption and increased flood-related costs although the impact should be negligible and temporary.

MTL’s solvency position at end-June 2011 remained strong by all measures: amounting to 849% in the domestic solvency margin; 269% by EU standards; and 308% based on Thailand’s risk-based capital framework. MTL also maintains a conservative investment mix with about 80% of invested assets (including cash, loans and property) being fixed-income securities (bonds, bills of exchange and promissory notes) at end-June 2011. Equity and foreign currency investments remain moderate and fully hedged. The duration gap between assets and liabilities has gradually declined to single-digits. MTL is financially flexible as it has no outstanding debt and no funding requirements in the short- to medium-term.

Prospects for an upgrade of the International IFS rating over the medium-term are remote given its position relative to Thailand’s Local Currency sovereign rating (‘A-’/Stable). The National IFS rating is therefore unlikely to be upgraded further. Conversely, the International IFS rating and the National IFS rating could be downgraded if there is significant deterioration in capital with the local solvency margin falling below 500% for an extended period of time. In addition, steady and material erosion of franchise strength and a weakening of profitability measures due to aggressive growth may lead to negative rating action.

Latest Press Release

USD120,000 at stake in CIMBs 3D Conquest to unearth ASEANs top #digital talents Competition sets path for nurturing crucial skills in data science, FinTech and coding among tertiary students

CIMB Group Holdings Berhad ("the Group" or "CIMB") has launched the CIMB 3D Conquest, a competition that aims to identify and attract ASEAN's top creative, young digital talent with an agile and entrepreneurial mindset. Open to all tertiary students, the...

Allianz to become Worldwide Olympic Insurance Partner

The International Olympic Committee (IOC) and Allianz today announced that the insurer will join the "Worldwide Olympic Partner" (TOP) Programme in 2021. Through this sponsorship agreement, Allianz will work with the IOC to provide innovative and...

BYFX Global Co., Limited Announces Business Launch

BYFX Global Co., Limited (BYFX Global) today announced the launch of its retail and institutional business -- offering clients around the globe top-tier liquidity and online OTC trading for Spot FX and Spot Bullion[1]. Striving towards financial...

2018 Robot World to Suggest Direction for the Fourth Industrial Revolution

Showcasing the latest robot technologies from around the world, the 2018 Robot World will be held at KINTEX, Korea from October 10-13, 2018. The Robot World (, celebrating its 13th anniversary this year, consists of four main...

ชวนผู้ประกอบการเรียนรู้เส้นทางความสำเร็จของสตาร์ทอัพแอปพลิเคชัน เคลมดิ อังคาร 25 ก.ย. นี้

ตลาดหลักทรัพย์ฯ ขอเชิญผู้ประกอบการ Social Enterprise (SE) SMEs และ Startup ร่วมอบรมครั้งพิเศษในโครงการ SET Social Impact Gym หัวข้อ "Fintech vs Social Startup... Lesson Learned..." พบกับสตาร์ทอัพเจ้าของแอปพลิเคชัน "เคลมดิ" (Claim Di)...

Related Topics