The combined ratio of reinsurers should improve

Thai Reinsurance Public Company’s (THRE) combined ratio rose to 114% in 9M21 from an average of 106% over 2018-20, notes Fitch Ratings.

The global credit rating agency says it expects the reinsurer’s operating performance to fall back below 103% from 2022, supported by the expiration of COVID-19-related lump sum payment policies in 1H22, additional allocated reserves and strong performance in other businesses, such as automotive and property. Fitch also notes that the reinsurer continues to focus on maintaining profitability and containing losses across all product lines.


Fitch has an Insurers Financial Strength Rating (IFS) of THRE at “A-” (Strong). The outlook is “stable”.

The assertion reflects THRE’s “favorable” business profile, “strong” capitalization and “good” investment and liquidity risk. It also takes into consideration its poor underwriting performance in 2021 and ongoing challenges to maintain earnings.


THRE maintained a “strong” capitalization, with its risk-based capital ratio (RBC) at 250%, well above the local regulatory minimum of 120% at the end of September 2021. Fitch expects the ratio Reinsurer RBC remains above 280% in 2022. Fitch estimated its score on Fitch’s Prism model to be “extremely strong” in 2021, although profits in 2021 were likely lower due to high claims from insurance policies. related to COVID-19, in particular in lump sum payment policies.


THRE’s investment strategy is generally conservative and liquid, with over 75% of the portfolio in cash, deposits and fixed income instruments. The company reduced the proportion of equities in its holdings during the pandemic to improve the liquidity position, which led to a drop in the risky asset ratio of 46% at the end of September 2021.

However, Fitch expects the ratio to return to its usual level of 50% to 60% in the medium term to maintain higher investment returns, and for the company to keep its investment risks manageable. The company’s sovereign investment-to-equity ratio was 67% at end-September 2021, and its liquid assets-to-reserves ratio was above 180%.

Company Profile

Fitch rates THRE’s corporate profile as “favourable”, due to a “favourable” company profile and “moderate/favourable” corporate governance compared to that of all other companies in Fitch. Thai non-life insurance. Its business profile is supported by its competitive position as the only local non-life reinsurer with a consistent market share of 30% to 40% of premiums ceded locally, and well-diversified lines of business with the ability to serve corporate unconventional.

The company’s profile is balanced by its “least favourable” scale of operation as a reinsurance company and the volatility of its earnings. Fitch has therefore rated THRE’s Corporate Profile at “a-” in accordance with its Credit Factor Rating Guidelines.

Sallie R. Loera