Fitch Ratings has affirmed Thai Life Insurance (TLI) Public Company Limited's Insurer Financial Strength (IFS) Rating at 'A-' (Strong) and national IFS Rating at 'AAA(tha)'. The Outlook is Stable.
The affirmation reflects TLI’s resilient financial performance, supported by a sound new business value (NBV) margin, ‘Favourable’ company profile and solid risk-based capitalisation. These strengths are partially offset by its asset and investment risk.
Rating drivers
Resilient financial performance: TLI’s earnings demonstrate resilience amid subdued economic activity and high medical inflation, with annualised ROE of 11% in 9M2024, similar to the average from 2022 to 9M2024 of 10%.
TLI’s NBV margin remained strong in 9M2024 at 62% (9M2023: 62%), supported by sound margin from endowment and whole life product types, as well as a slightly higher contribution to annualised premium equivalent from insurance riders. These riders’ NBV margin weakened slightly in 9M2024 but remained robust at 92% (9M2023: 101%).
The resilience is also supported by TLI’s stable investment yield, which has been consistently above 3%, enhancing the stability of its earnings profile and financial performance.
Strong market presence: TLI has a robust business franchise in Thailand, with the third-largest market share by total premiums written in 2024 at 13.4% despite a moderate operating scale relative to regional insurers. Fitch assesses TLI’s company profile as ‘Favourable’ compared to other Thai insurers, due to a ‘Favourable’ business profile and ‘Neutral’ corporate governance profile.
TLI offers a comprehensive product range, including protection, savings, healthcare and investment-linked products. The company benefitted from established and robust distribution channels in 2024, with tied agents contributing about 74% of premiums and bancassurance partnerships with multiple local banks contributing about 19%. Other channels accounted for 7% of premiums.
Solid risk-based capitalisation: We estimate TLI’s Fitch Prism Global Model score was in the ‘Extremely Strong’ category at end-3Q2024, similar to our assessment for 2023. The RBC ratio improved to 410% by end-3Q2024 from 398% in 2023 and was well above the regulatory requirement of 140%. Fitch anticipates TLI will maintain solid capitalisation with an extensive buffer over the medium term.
Risky asset ratio remains substantial: TLI’s Fitch-adjusted risky asset ratio remained high at 185% at end-3Q2024 (2023: 182%). Risky assets were mainly equities, bonds rated below investment grade on the international scale, and its material exposure to sovereign bonds (50% of TLI’s total investment at end-3Q2024, with 15% of the exposure included as risky assets under Fitch’s criteria). The risky asset ratio remains above the guideline for IFS ‘A’ rating category.
TLI’s portfolio mix was largely unchanged, with fixed-income securities and deposits making up of 80% of the total portfolio at end-3Q2024.