Muang Thai Life to see improved new business value growth: Fitch Ratings

MTL has witnessed a modest earnings recovery during the third quarter of 2023.

Fitch Ratings anticipates the improvement of the Muang Thai Life’s (MTL) new business value growth in the medium term, supported by robust demand for health-related products, protection, and riders in preparation for IFRS17, as well as enhanced market opportunities through its partnership with KBank and efficiency gains from digital transformation in distribution networks.

MTL has witnessed a modest earnings recovery, with an annualised return on equity rising to 6.8% in 3Q23, compared to below 6.5% in 9M22 (2021: 10.2%). Its three-year average return on equity over 2021-9M23 stands at 7.9%, within the range for its rating category. 

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Despite an increase in the allocation of fixed-income securities to 81% in 3Q23, up from 77% in 2021, MTL's overall risky asset ratio remained unchanged. 

The three-year average risky asset ratio stood at 241%, similar to 243% at 3Q23. This is attributed to a slight rise in the allocation to below-investment-grade bonds, which constituted 95% of capital in 3Q23, compared to 90% in 2021.