The rating reflects the strength of BKI’s balance sheet, which AM Best assesses as very strong, a good operating performance, a neutral business profile and good corporate risk management.
BKI’s balance sheet strength assessment of Very Strong is underpinned by risk-adjusted capital, which was at its strongest level in 2021, as measured by Best’s Capital Adequacy Ratio (BCAR) As such, it is expected to remain at least at very strong levels in the future. Capital adequacy is underpinned by the company’s low net underwriting leverage, partially offset by a high-risk investment portfolio consisting of large and concentrated holdings of domestic equities. In addition, the company relies moderately on reinsurance to manage its exposure to catastrophes, accumulations and large single risks.
AM Best considers BKI’s performance to be adequate, as evidenced by a five-year average return on equity of 6.7% and a combined ratio of 91.5% (2017-2021). Nonetheless, the company reported underwriting losses in the first nine months of 2021 and 2022 due to the frequent occurrence of his COVID-19 claims related to single-premium health insurance products. Despite the poor performance of his BKI health business over the past two years, the company’s primary auto, all-risk and fire underwriting results continue to be profitable. Despite disappointing technical and operational performance in the first nine months of 2022, AM Best is particularly pleased that his COVID-19 health insurance coverage for the company’s lump sum has expired in mid-2022. After that, we expect performance to improve.
Neutral’s business profile rating reflects the company’s position as Thailand’s third largest non-life insurer with a market share of around 8.6% based on direct premiums written in 2021.from
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