AM Best has upgraded Hanoi Reinsurance Joint Stock Company’s (Hanoi Re) long-term issuer credit rating (Long Term ICR) to “bbb+” (Good) from “bbb” (Good) and changed the outlook to stable from positive.
The rating agency also affirmed Hanoi Re’s Financial Strength Rating (FSR) as B++ (Good) and Vietnam Country Scale Rating (NSR) as aaa.VN (Excellent), both with stable outlooks.
AM Best noted that the ratings reflect Hanoi Re’s balance sheet strength, which it assesses as strong, as well as strong operating performance, limited business profile and appropriate enterprise risk management.
The ratings also take into account an upgrade in the ratings of HDI Haftpflichtverband der Deutschen Industrie VaG, Hanoi Re’s ultimate parent company
The long-term ICR upgrade reflects Hanoi Re’s strengthening balance sheet fundamentals in recent years.
AM Best expects Hanoi Re’s risk-adjusted capital to remain at its highest level over the medium term. In fiscal 2025, although the company’s capital adequacy ratio remains strong, capital requirements have increased due to strong business growth and rising investment risks.
The company’s investment portfolio is moderately risky, with investments primarily allocated to cash and time deposits, with the balance comprised of unrated corporate bonds and affiliated private equity investments.
Hanoi Re’s high reliance on retrocession to support underwriting of large commercial risks is seen as an offsetting factor, although reinsurance counterparty risk is partially mitigated by a high-quality retrocession counterparty group.
Meanwhile, AM Best believes the company’s operating results are strong and investment returns are expected to remain a major contributor to overall earnings.
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