BKK Reinsurance and Dhipaya on CreditWatch
Standard & Poor's Rating Services is putting the credit ratings of Bangkok Insurance Plc and Dhipaya Insurance Plc on CreditWatch with negative implications, due to significant risk exposure to flood-affected areas in Thailand.
Loss estimates are still evolving, but the companies' earnings and capital positions could weaken if the losses are at the higher end of the expected range.
S&P placed its 'A' longterm counterparty credit and insurer financial strength ratings on the two insurer, which have significant market shares of about 7.7 per cent and 8.1 per cent, respectively, of the local insurance industry.
The latest action reflects the view that the earnings and capital positions of Bangkok Insurance and Dhipaya Insurance could materially weaken due to large losses following recent flooding in Thailand.
While the losses are uncertain, the retained amount for local insurers could range from manageable to unexpected. Currently, the market estimates losses to be between Bt200 billion and Bt600 billion. Local insurers could be materially hit if the loss is at the higher end of the projected range.
Earlier, the rating company placed Thai Reinsurance Plc's rating on the CreditWatch with negative implications.
