S&P withdraws rating on Dhipaya
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Dhipaya Insurance has requested Standard and Poor's Ratings Services to terminate its service on the company's long-term local currency credit rating, the rating agency announced.
Prior to the ratings withdrawal, S&P affirmed a "BBB" rating with a negative outlook to its bonds. It viewed that the company had benefited from good shareholder support for new business opportunities and the company's continued efforts to expand and develop its sales channels. The listed company also has high profile state-linked shareholders.
"We considered Dhipaya's capital position as moderate owing to losses from the 2011 floods in Thailand and the insurer's rapid growth strategy. Additionally, Dhipaya's reliance on reinsurance subjects it to increased counter-party risks."
Yet, the negative outlook reflects the view that Dhipaya's credit profile could further weaken over the next 12–24 months due to the uncertainty surrounding the extent of its flood-related losses. In addition, losses from market agreements (sharing of business with other insurers) and business interruption claims could further develop and negatively affect the company.
