AM Best describes Bao Min Insurance’s outlook as ‘stable’

This was attributed to the neutral impact of BMI's majority ownership by the SCIC, Vietnam's sovereign wealth fund.

Bao Minh Insurance Corporation (BMI) is foreseen to have a stable outlook, amidst a strong balance sheet strength, assessed as strong by AM Best, along with adequate operating performance, a neutral business profile, and appropriate enterprise risk management. 

The assessments consider the neutral impact of BMI's majority ownership by the State Capital Investment Corporation (SCIC), Vietnam's sovereign wealth fund.

BMI's balance sheet strength is supported by its risk-adjusted capitalization, expected to remain at the strongest level in the near to medium term. 

However, the regulatory solvency ratio has seen a decreasing trend due to business growth exceeding the rate of capital generation. 

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BMI's investment portfolio is viewed as moderate risk, with a majority in term deposits and the rest in non-rated corporate bonds, equity investments, and real estate. 

AM Best notes some offsetting factors, including BMI's basic approach to asset liability management and moderate dependence on reinsurance for underwriting large limit risks.

The operating performance is considered adequate, with a five-year average return-on-equity ratio of 10.1% (2018-2022). BMI achieved underwriting profits in recent years, though a high expense ratio remains a counterbalance. 

Business profile assessment is neutral, with BMI being the fourth-largest non-life insurer in Vietnam based on 2022 direct premiums. The company has a diversified underwriting portfolio by lines of business, but it has a single-market concentration in Vietnam, with business referrals from majority shareholder SCIC contributing to its business profile.