Muang Thai Life’s profitability set for medium-term recovery

Fitch also projects capitalisation to stay stable in 2025.

Muang Thai Life Assurance’s profitability is expected to continue recovering in the medium term, Fitch Ratings said.

It also maintained a substantial market share of about 11% of total premium income, benefiting from operational support from its major shareholders, KASIKORNBANK and Ageas Insurance International.  

Capitalisation remains robust, with the RBC ratio improving to 381% at the end of the third quarter of 2024, well above Thailand’s regulatory requirement of 140%. 

Fitch projects capitalisation to stay stable in 2025, following a reduction in financial leverage to 9.5% due to the partial repayment of $100m in subordinated debt last year.  

MTL’s profitability is gradually improving, with an annualised return on equity (ROE) of 6.9% for the first nine months of 2024, compared to 6.6% in 2023. 

Fitch anticipates further improvements in new business value, aided by industry-wide adjustments to manage medical inflation, including co-payment adoption and product repricing. 

Growth opportunities from its partnership with KBank and efficiency gains from digital transformation are also expected to support earnings.  

However, MTL’s investment portfolio remains heavily weighted towards risky assets, with a risky asset ratio of 237% at the end of the third quarter of 2024.

This exposure is driven by holdings in equities, below-investment-grade bonds, and sovereign bonds. The sovereign investments-to-capital ratio stood at 320% as of the same period.