Thai Reinsurance Public Company Limited (THRE) is poised to manage the anticipated losses from its Accident and Health (A&H) business in 2025, with growth in its property and motor sectors expected to offset these challenges.
According to Fitch Ratings, THRE’s property and motor business, which comprises 40% to 45% of its operations, is expected to drive growth despite inflationary pressures in the A&H segment. The ratings agency affirmed the company’s A- rating and assigned a stable outlook, noting that inflation in medical costs has significantly impacted the A&H business, which accounts for approximately half of THRE’s operations. This inflation has raised the segment’s combined ratio, a key indicator of underwriting performance.
Fitch, however, anticipates that THRE’s losses in the A&H line will be manageable in 2025 due to strategies such as repricing, slower growth, and the broader industry’s adoption of co-payment models, particularly for medical expenses insurance. As a result, the company’s underwriting performance is expected to remain stable, with its combined ratio projected to stay below 100%.
In addition, THRE’s risky-asset ratio is anticipated to rise further from 42% in Q3 2024, up from 33% in 2023, as the company seeks to maintain higher investment returns in a disinflationary environment.
Fitch also noted that THRE experienced a foreign-exchange loss in 2024 from a U.S. short-term treasury fund. However, the company is expected to recover part of this loss by the end of the year due to the depreciation of the baht.
Overall, Fitch’s outlook for Thai Reinsurance remains stable as the insurer navigates challenges in its A&H business while benefiting from growth in its property and motor segments.
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