Bangkok--17 Mar--Fitch Ratings Fitch Ratings has today assigned Muang Thai Life Assurance Company Limited (MTL) an Insurer Financial Strength (IFS) 'BBB+' rating and a National IFS rating of 'AA(tha)'. The Outlook on both ratings is Positive. An IFS rating provides an assessment of the insurance company's financial strength to meet its policyholder obligations. The IFS rating also reflects the ability of the insurer to meet obligations on a timely basis, and expected recoveries received by claimants in the event the insurer stops making payments or payments are interrupted. The ratings reflect MTL's strong business profile in the local market, prudent capitalisation compared with its regional and local peers, its effective multi-distribution channel strategy and solid track record of financial performance. The ratings also take into consideration the technical and operational support provided by its minority shareholder, Fortis Insurance International N.V. (Fortis) (a wholly-owned subsidiary of Fortis Insurance N.V., Issuer Default Rating (IDR) 'AA-' (AA minus)/ Outlook Stable). The Positive Outlook reflects Fitch's expectation that MTL will develop strong synergies with Fortis and Kasikornbank Public Company Limited, the fourth-largest Thai bank (rated IDR 'BBB+'/'AA(tha)', Outlook Stable) to strengthen its market position and to generate strong financial performance without foregoing its prudent capitalisation. MTL is developing its internal risk management framework with Fortis and its ability to introduce comprehensive risk management measures into its operational structure should also assist its future performance. Despite the competitive local life insurance market, MTL managed to improve its market share (as measured in total premiums) and sustain its top five ranking position within the country. Its financial performance has shown a positive trend - with its reported return of equity (ROE) and return of asset (ROA) as at 9M07 improving to 25.1% and 3.2%, respectively, from 18.8% and 2.3% at FY06. Overall profitability is expected to be maintained in FY08, reflecting MTL's competitive advantage in its multi-distribution channels and innovative product development strategies. MTL's prudent capitalisation is significantly above the local regulatory requirements, and internally benchmarked against European regulatory standards. Its local solvency margin position is currently at more than 700% in FY07, which is higher than the local statutory minimum level of 100%. The ratings are, however, constrained by the intense competition among major life insurers in the Thai life insurance market, which results in low profit margin. While MTL's overall profitability level has improved, some of its products are faced with negative new business margin (NBM), although management has taken steps to address this issue. Similar to other Asia life insurers, MTL also faces asset-liability management issues in a relatively undeveloped local fixed-income market. The maturity gap between assets and liabilities remains high but this has gradually improved with MTL's active management of its investment portfolio. A majority of its investment portfolio were in Thai government or state enterprise bonds, while 24.7% was to mostly highly rated corporate and bank bonds and 8.7% to stocks as at Q307. MTL, established in 1951, ranks as the forth-largest insurer in Thailand with a 7.0% market share in total premiums. Fortis holds a direct ownership of 25% in MTL and a further economic interest of 15% is held through its stake in Muang Thai Fortis Holding Company Limited (MTFH). The Lamsam family group holds an economic interest of 49% via its stake in MTFH. Contacts: Darunee Peanmanakit, Bangkok, +662 655 4752; Jeffrey Liew, Hong Kong, +852 2263 9939; Vincent Milton, Bangkok, +662 655 4759. Media Relations: Shivani Sundralingam, Singapore, Tel: + 65 6796 7215.