Bangkok--18 Aug--Fitch Ratings
Fitch Ratings (Thailand) Limited says the strong growth of the Thai insurance sector over the past few years is likely to be sustained, given the longer term fundamentals for the industry such as the still low market penetration and growing middle class. Tax incentives and bancassurance have helped to boost growth in the sector.
``The agency expects to see the strong industry performance continue, given strong business growth and the rising interest rate environment,” said Narumol Charnchanavivat, Director on Fitch’s Insurance team, who spoke today at the agency’s inaugural Life Insurance Conference in Bangkok. ``Fitch also expects the industry to consolidate after the implementation of a stricter regulatory capital framework,’’ Ms. Charnchanavivat added.
With respect to other Asian markets, Fitch notes that China’s major life insurers are shifting towards ensuring product quality rather than quantity -- a key theme for the sector in 2010 which will lend support to their credit profiles.
“The potential of new investment channels, interest rate increases, and an increased regulatory focus on solvency, will be positive for China’s life insurance sector in 2010,” said Jeffrey Liew, Head of Asia-Pacific Insurance at Fitch Ratings. Mr. Liew touched at length on the resilience of life insurance markets in Asia.
Among the other conference highlights was an opening address on regulatory developments in Thailand by Ms. Chumluang Chatsuwan, Deputy Secretary General of the Office of Insurance Commission. Other keynote speakers included Mr. Sara Lamsam, President and Chief Executive Officer of Muang Thai Life Assurance and former Chairman of the Thai Life Assurance Association, who spoke on the key challenges and developments facing Thai life insurers.
Fitch currently issues more than 50 insurance credit ratings across the Asia-Pacific region, including American International Assurance Company (National Insurer Financial Strength (IFS) rating ‘AAA(tha)’) and Muang Thai Life Assurance Limited (National IFS rating ‘AA(tha)’) in Thailand. The Outlook on most Asian insurance ratings is Stable, with the exception of Japanese life insurers.
Contacts:
Primary Analyst
Narumol Charnchanavivat,
Director
+66 2655 4755;
Wave Place 13th Fl., 55 Wireless Road,
Lumpini, Patumwan, Bangkok.
Secondary Analyst
Siew Wai Wan,
Director
+65 6336 6802;
Head of Insurance, Asia Pacific
Jeffrey Liew,
Senior Director
+852 2263 9939.
Disclosure: Kasikorn Asset Management Company Limited (of which KBANK holds a 100% stake) owns 10% of the shares in Fitch Ratings (Thailand) Limited. Muang Thai Life Assurance Company Limited (of which KBANK holds a 38.3% economic interest) owns 10% of the shares in Fitch Ratings (Thailand) Limited. TISCO Asset Management Company Limited (of which TISCO Financial Group Public Company Limited holds 100%) owns 10% of the shares in Fitch Ratings (Thailand) Limited. No shareholder, other than Fitch Ratings Limited of the UK, is involved in the day-to-day operations of, or credit rating reviews undertaken by Fitch Ratings (Thailand) Limited.
Note to Editors: Fitch’s National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated ‘AAA’ and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as ‘AAA(tha)’ for National ratings in Thailand. Specific letter grades are not therefore internationally comparable.
Additional information is available at www.fitchratings.com.
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