AM Best Confirms Post-Telecommunication Joint Stock Insurance Corporation Credit Ratings


SINGAPORE–(BUSINESS WIRE)–AM Best confirmed the financial strength rating of B++ (good) and the issuer’s long-term credit rating of “bbb” (good) of Post-Telecommunication Joint Stock Insurance Corporation (PTI) (Vietnam). The outlook for these Credit Ratings (ratings) is stable.

The ratings reflect PTI’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operational performance, neutral business profile and appropriate enterprise risk management (ERM).

The company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remained at the highest level in 2020. PTI’s investment portfolio is conservative with a large allocation to cash and deposits, although there is some exposure to unrated fixed securities. -income instruments. The company’s capital adequacy continues to be pressured by increased underwriting risk, which has exceeded the company’s capital generation for some time. Underwriting and investment risks are expected to increase moderately over the medium term, which could reduce the company’s risk-adjusted capitalization.

Over the past five years, PTI has posted a satisfactory average combined ratio of 97.3% (2016-2020) and an average return on equity of 8.1%. While the company had a favorable loss ratio in the forties, its operating expense ratio was high due to acquisition costs and large operating expenses. Due to the COVID-19 pandemic, the development of PTI’s business has been hampered, as evidenced by the marked decline in its gross written premium growth rates. Nonetheless, investment results from interest income and dividends continued to make an adequate contribution to the company’s net earnings.

PTI is the third largest non-life insurer in Vietnam, with a market share of around 11% in terms of direct written premiums in 2020. The company led the market in a number of key segments. In particular, it was ranked first in auto insurance and second in health insurance in 2020. Although PTI continues to face intense price competition in auto insurance, it differentiates itself from other insurers with high quality services at the instead of relying on discounts. The company has a strategic partnership with Vietnam Post Corporation, which provides PTI with exclusive access to the company’s extensive network. In addition, the company benefits considerably from the investment, underwriting and capital management expertise of its major shareholders.

PTI’s ERM is supported by a comprehensive risk framework with a clear risk appetite and appropriate control measures. The company adopts an appropriate reinsurance program with low deductible levels and sufficient coverage for very high risk events. Risk management capabilities are aligned with key risk profiles and are expected to be further enhanced through knowledge transfer from one of the company’s shareholders, DB Insurance Co., Ltd.

Ratings are communicated to rated entities before publication. Unless otherwise indicated, the ratings have not been changed as a result of this communication.

This press release relates to credit ratings that have been published on AM Best’s website. For all rating information relating to the release and relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For more information on the use and limitations of credit rating opinions, please see Best’s Guide to Credit Ratings. For more information on the proper use of Best’s Credit Scores, Best’s Preliminary Credit Scores, and AM Best’s press releases, please see Guide to the Proper Use of Best Scores and Ratings.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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