2nd biggest non-life insurer’s underwriting results expected to normalise


The underwriting performance of Dhipaya Insurance Public Company, the second-biggest non-life insurer in Thailand, is expected to normalise as the company will no longer be affected by COVID-19-related claims given that these policies expired in 2022, says AM Best.

The global credit rating agency also says that Dhipaya’s operating performance is assessed as strong, with a five-year average return-on-equity ratio of 20.2% and a combined ratio of 83.6% (2018-2022), says AM Best.

While the company generated strong underwriting performance in 2022, it recorded a reduced technical profit as a result of unfavourable claims experience from COVID-19-related policies.

Dhipaya’s investment income, which comprises interest and dividend income, continues to provide a sizeable contribution to the overall earnings.


AM Best has revised the outlooks to ‘Negative’ from ‘Stable’ and affirmed Dhipaya’s Financial Strength Rating of ‘A-’ (Excellent) and the Long-Term Issuer Credit Rating of ‘a-’ (Excellent).

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

The negative outlooks reflect increasing pressure on Dhipaya’s balance sheet strength assessment. This is due to increased volatility and a reducing buffer in the company’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR).

Balance sheet

Dhipaya’s risk-adjusted capitalisation declined to the very strong level in 2022, driven by a large dividend payout that exceeded the company’s net profit for the period and fair value losses arising from investments. Other balance sheet factors include Dhipaya’s moderate risk investment strategy, given its notable allocation to equities and mutual funds.

In addition, the company relies heavily on reinsurance, although this is mitigated partially by the typically high credit quality of its reinsurance counterparties. The balance sheet strength assessment also factors in a neutral holding company impact arising from the company’s ultimate ownership by Dhipaya Group Holdings Public Company Limited.

Business profile

AM Best assesses Dhipaya’s business profile as neutral. The company has a strong presence in Thailand’s non-life market, ranking second with a market share of 12% in 2022 based on direct premium written.

Dhipaya holds a dominant market position in several major segments such as personal accident and health, fire and industrial all-risks. The company’s business profile also benefits from its strong shareholder support through business referrals and access to extensive countrywide distribution networks.

AM Best views Dhipaya’s risk management capabilities as appropriate relative to the profile of the key risks. The company has a defined risk appetite and tolerances for key risk categories, as well as developed risk management policies and tools to support its risk identification and control functions.


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