Steady outlook seen for Thai Reinsurance Public: Fitch Ratings

Growth is expected in the accident and health sectors.

Thai Reinsurance Public (THRE) is predicted to continue its selective approach and maintain strict underwriting terms to balance inflationary pressures on claims with premium adjustments this year, according to a report by Fitch Ratings.

The company’s solid capitalisation is evident in its “extremely strong” rating in Fitch's Prism Model, with a risk-based capital (RBC) ratio well above regulatory requirements.

THRE's favourable company profile is reinforced by its unique position as Thailand's only local non-life reinsurer, capturing a significant portion of local ceded premiums. Its strength lies in a diversified portfolio and the ability to handle non-conventional business lines.

In terms of investments, THRE has traditionally been conservative but is expected to shift towards riskier assets, including equities, for higher yields in 2024. 

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Its investment portfolio has been heavily weighted towards cash, deposits, and fixed-income instruments, with a low risky assets ratio.

The key factors influencing this very stable assessment include an anticipated stable underwriting performance in 2024, with the combined ratio remaining under 100%. Growth is expected in the accident and health sectors and conventional businesses in a challenging market. 

THRE saw an improvement in its combined ratio from 112% in the first nine months of 2022 to 98% in the same period in 2023, aided by the absence of COVID-19-related health policies. A slight improvement in return on equity (ROE) is also expected, stabilizing between 4%-6%.