February 12, 2016 / 7:37 AM / 2 years ago

Fitch Affirms Thai Life Insurance at 'A-'; Outlook Stable

(The following statement was released by the rating agency) BANGKOK/SINGAPORE, February 12 (Fitch) Fitch Ratings has affirmed Thai Life Insurance Public Company Limited's (TLI) International and National Insurer Financial Strength (IFS) ratings at 'A-' and 'AAA(tha)', respectively. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect TLI's sound financial performance, prudent investment approach and solid domestic market franchise. The ratings also take into consideration a strong capital position. TLI is the third-largest life insurer in Thailand by total premiums, with a 12.5% market share in the first 11 months of 2015. This strong market position is supported by a long-established franchise and extensive agency network nationwide. The company's main distribution channel is agents, which accounted for 82.4% of its premium written in the first nine months of 2015. TLI has the second-largest market share (21.0%) in premiums written through agents. TLI's financial performance remains solid, supported by its prudent pricing, strong distribution platform and acceptable investment return. The company's three years (2012-2014) average pre-tax return on assets was 2.4% (annualised 3Q15: 2.7%), which compares well with its local and international peers. TLI's asset allocation for its investments is mainly unchanged and remains conservative. Fixed-income securities, cash and deposits represented about 85% of invested assets at end-3Q15. Furthermore, allocation to equities remains well below 10% of TLI's total invested assets. TLI's Prism Factor-Based Capital Model (Prism FBM) score was 'Extremely Strong' based on its 3Q15 financials. Fitch expects TLI's full-year 2015 results will place it in the 'Extremely Strong' range. TLI's Prism FBM results are supported in particular by a high level of equity capital. The company's capital ratio based on risk-based capital (RBC) was 374% at end-3Q15, much higher than the regulatory minimum of 140%. TLI has a strategic partnership with Meiji Yasuda Life Insurance Company (MYL; IFS: A/Stable), which includes MYL owning 15% of TLI. TLI has benefitted from MYL's support in risk management, sales and product capabilities through the interaction between the two companies. RATING SENSITIVITIES Key rating triggers for a downgrade would include a major decline in its capital buffer that would be seen in its RBC ratio dropping below 250% for an extended period, and a sustained weakening in profitability that is reflected in pre-tax return on assets remaining below 1%. TLI's IFS rating is likely to be lowered if Thailand's Long-Term Local-Currency Issuer Default Rating (IDR) of 'A-'/Stable were downgraded. An upgrade is unlikely in the near term as TLI's International IFS rating is at the same level as Thailand's Long-Term Local-Currency IDR. TLI's National IFS 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 6 Temasek Boulevard #35-05 Suntec Tower Four Singapore 038986 Trin Siriwutiset (National rating) Associate Director +662 108 0154 Fitch Ratings (Thailand) Limited 57 Wireless Road Lumpini, Patumwan Bangkok 10330 Secondary Analysts Trin Siriwutiset (International rating) Associate Director +662 108 0154 Siew Wai Wan (National rating) Senior Director +65 6796 7217 Committee Chairperson Jeffrey Liew Senior Director +852 2263 9939 Thai Life Insurance Public Company Limited has a 10% equity stake in Fitch Ratings (Thailand) Ltd. No shareholder other than Fitch Ratings Limited is involved in the day-to-day rating 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. Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available at www.fitchratings.com. Applicable Criteria Insurance Rating Methodology (pub. 16 Sep 2015) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here _id=999429 Solicitation Status here Endorsement Policy here ail=31 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 WEBSITE '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.

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