SINGAPORE--(BUSINESS WIRE)--Aug 30, 2018--A.M. Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” of Royal Insurance Corporation of Bhutan Limited (RICB) (Bhutan). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect RICB’s balance sheet strength, which A.M. Best categorizes as strong, as well as its strong operating performance, neutral business profile and marginal enterprise risk management (ERM).

RICB’s strong risk-adjusted capital position is supported by its investment portfolio, which mainly comprises loans and deposits. The company’s earnings have been consistently positive, derived primarily from its sizable portfolio of loans and advances. The neutral business profile reflects the company’s market-leading position in the relatively small life and non-life markets of Bhutan. RICB is the larger of two insurance companies in the country and holds a monopoly position in the life insurance sector in its domestic market.

Offsetting rating factors include RICB’s ERM, which is assessed as marginal. The company has no developed asset-liability management framework for its life insurance business. The risk of asset-liability mismatches have been heightened by significant growth in RICB’s annuity business in recent years, which increased the company’s reserve leverage ratio to 2.8 times as of Dec. 31, 2017.

Positive rating actions are unlikely in the near term. Negative rating pressure could result if risk-adjusted capitalization deteriorates as a result of adverse operating performance.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s web page. For additional information regarding the use and limitations of Credit Rating opinions, please view . For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view .

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PUB: 08/30/2018 02:12 PM/DISC: 08/30/2018 02:12 PM