OREANDA-NEWS. Fitch Ratings has affirmed Muang Thai Life Assurance Public Company Limited's (MTL) International and National Insurer Financial Strength (IFS) ratings at 'A-' and 'AAA(tha)', respectively. The Outlook is Stable.

KEY RATING DRIVERS
The ratings reflect MTL's strong capital position, sustained solid financial performance, strong market position and acceptable investment risks. The ratings also reflect support from its major shareholders, Kasikornbank Public Company Limited (KBANK; Issuer Default Rating: BBB+/Stable), Thailand's fourth-largest bank by total assets, and Ageas Insurance International N.V. (Ageas; IDR: A-/Stable). The company enjoys exclusive bancassurance distribution by KBANK and benefits from technical and operational support from Ageas.

MTL's Prism Factor-Based Capital Model (Prism FBM) score was 'Very Strong' based on its 2014 financials. Fitch expects that MTL's 2015 results will place it in the 'Very Strong' range. In particular, MTL's Prism FBM results are supported by a high level of equity capital. The company's capital ratio based on risk-based capital (RBC) was 517% at end- 1Q15, which was among the highest in the industry and well above the regulatory minimum of 140%. It has no leverage and does not have any plans to use debt financing.

Fitch expects MTL's financial performance to remain solid, supported by the company's prudent pricing policy and sound investment income. The company's three-year average (2012-2014) pre-tax return on assets of 4.1% compares well with that of its local and regional peers, and reflects the company's consistent high level of profitability.

MTL is the second-largest life insurer in Thailand by total premiums. Its market share of gross premiums written increased to 14.9% in 2014 from 13.6% in 2013. The company also has the highest market share in new business premiums written with 20.7% in 2014, supported by its strong bancassurance distribution. MTL is the market leader in premiums written through bancassurance channels with a 25.1% market share in 2014.

MTL continues to invest in high quality assets, mainly fixed-income instruments, which accounted for 85% of invested assets. The majority of its fixed-income investments are issued by governments and state enterprises. Investments in equities are maintained at less than 10% of invested assets.

RATING SENSITIVITIES
Key triggers that could lead to a downgrade include a drop in MTL's RBC ratio to below 250% for an extended period and a decline in profitability as reflected in MTL's pre-tax return on assets sustained at below 1%. In addition, a deterioration under the Prism FBM measure of capital could be a catalyst for future negative rating pressure.

If Thailand's Long-Term Local-Currency IDR of 'A-' with a Stable Outlook were downgraded, MTL's IFS rating would likely be lowered.

An upgrade is unlikely in the near term as MTL's International IFS rating is at the same level as Thailand's Long-Term Local-Currency IDR. MTL's National IFS rating is already at the highest possible level.