Post by account_disabled on Dec 28, 2023 4:06:17 GMT -6
vThai life insurance companies' capital levels may come under pressure from increased investment in risky assets to compensate for prolonged periods of low investment returns. However, Fitch expects the industry's average capital adequacy ratio to remain at a similar level after the new capital adequacy criteria come into effect in 2020, as the overall life insurance industry remains at a level. The fund is quite strong. Portfolios invested in low-risk assets remain large. and the company has timely changed its business strategy Fitch expects that domestic life insurance companies will gradually increase their exposure to high-risk assets to compensate for lower returns on government bonds. Many life insurance companies have initiated the development of real estate projects such as office buildings. or projects related to health services in order to create a higher and more consistent return on investment. There is also an additional weight on investing in private debt instruments and in other securities that offer higher returns. The life insurance company holds approximately 22% of total investment assets in private debt instruments. and invest in equity instruments and real estate investment units in a proportion higher than 10%, based on information from.
the Office of the Insurance Commission as of the end of the third quarter of 2019. Other assets that life insurance companies may invest in include various instruments. country Loans from life insurance policies and direct investment in real estate projects Therefore, Fitch expects that domestic life insurance companies will need to maintain additional capital due to market risk premiums under Stage 2 risk-based capital maintenance criteria being more stringent. The risk of investing in equity instruments on an accredited stock exchange may increase to between 16%-50% from 16%-20% under the first phase WhatsApp Number List of the framework, and the risk of investing in real estate that The range will increase to between 9%-19% from 4%-16%, while the commodity asset risk premium will increase to 50% from 15%. Interest rate sensitivity risk considerations will also be refined. of testing has also increased. This change in the market risk premium is still consistent with the results of the quantitative impact test on life insurance companies in 2017, which indicated that market risk is the main factor affecting the level of capital of a business.
Life insurance under the new capital maintenance framework Fitch is of the view that the average capital level of the Thai life insurance industry will not decline significantly even if life insurance companies holding large amounts of high-risk assets have lower capital levels. When the new, more stringent capital maintenance framework is announced, However, this increase in asset risk is likely to be partially alleviated by companies Still investing mostly in high quality debt instruments. Overall, the Thai life insurance business still invests in debt instruments from both the public and private sectors, averaging more than 80% of total investments since 2015, with the level of capital according to the criteria for maintaining capital according to risk level No. 1 at the end of the year. Q3 2019 at 387% is still much higher than the legal threshold of 140%. In addition, implementing a strong business strategy will allow the life insurance company to more appropriately manage the level of expected returns and the level of capital that must be maintained, such as reducing the volume of the life insurance product business in the type of savings that is not profitable. High returns and more appropriate improvements in insurance commission rates and selling expenses will help alleviate pressure on the company's investment returns. Moreover, investing in additional long-term assets such as investing in real estate. Careful monitoring will help the life insurance business to manage the difference between the life of assets and liabilities. (asset-liability mismatch) better and alleviate the impact of interest rate risk on the level of capital that life insurance companies must maintain according to more stringent capital maintenance criteria.
the Office of the Insurance Commission as of the end of the third quarter of 2019. Other assets that life insurance companies may invest in include various instruments. country Loans from life insurance policies and direct investment in real estate projects Therefore, Fitch expects that domestic life insurance companies will need to maintain additional capital due to market risk premiums under Stage 2 risk-based capital maintenance criteria being more stringent. The risk of investing in equity instruments on an accredited stock exchange may increase to between 16%-50% from 16%-20% under the first phase WhatsApp Number List of the framework, and the risk of investing in real estate that The range will increase to between 9%-19% from 4%-16%, while the commodity asset risk premium will increase to 50% from 15%. Interest rate sensitivity risk considerations will also be refined. of testing has also increased. This change in the market risk premium is still consistent with the results of the quantitative impact test on life insurance companies in 2017, which indicated that market risk is the main factor affecting the level of capital of a business.
Life insurance under the new capital maintenance framework Fitch is of the view that the average capital level of the Thai life insurance industry will not decline significantly even if life insurance companies holding large amounts of high-risk assets have lower capital levels. When the new, more stringent capital maintenance framework is announced, However, this increase in asset risk is likely to be partially alleviated by companies Still investing mostly in high quality debt instruments. Overall, the Thai life insurance business still invests in debt instruments from both the public and private sectors, averaging more than 80% of total investments since 2015, with the level of capital according to the criteria for maintaining capital according to risk level No. 1 at the end of the year. Q3 2019 at 387% is still much higher than the legal threshold of 140%. In addition, implementing a strong business strategy will allow the life insurance company to more appropriately manage the level of expected returns and the level of capital that must be maintained, such as reducing the volume of the life insurance product business in the type of savings that is not profitable. High returns and more appropriate improvements in insurance commission rates and selling expenses will help alleviate pressure on the company's investment returns. Moreover, investing in additional long-term assets such as investing in real estate. Careful monitoring will help the life insurance business to manage the difference between the life of assets and liabilities. (asset-liability mismatch) better and alleviate the impact of interest rate risk on the level of capital that life insurance companies must maintain according to more stringent capital maintenance criteria.