KUALA LUMPUR, Dec 11 -- AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of ‘a-’ of Malaysian Reinsurance Berhad (Malaysian Re) Malaysia.
The outlook of these Credit Ratings (ratings) is stable, according to a statement.
The ratings reflect Malaysian Re’s balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The company’s balance sheet strength is underpinned by its risk-adjusted capitalisation that is expected to remain at the strongest level over the medium term, as measured by Best’s Capital Adequacy Ratio.
Capital adequacy has been supported by Malaysian Re’s moderate underwriting leverage and a good quality retrocession panel, as well as from robust growth in shareholders’ equity from internal capital generation and capital raisings.
In addition, AM Best considers the company’s investment approach prudent, with the majority of invested assets being placed in cash and deposits, as well as government bonds and good quality corporate fixed-income instruments.
The global credit rating agency views the company’s operating performance as adequate.
Malaysian Re has reported operating profits consistently over the past five years (fiscal-years 2016 to 2020), with an average combined ratio of 101 per cent and return on equity ratio of five per cent.
The company’s investment results, arising from interest and dividend income, have remained a significant contributor to overall profitability during the past five years.
However, investment returns are expected to decrease over the near term, as domestic interest rates have fallen amid the COVID-19 environment.
More details at www.ambest.com.
-- BERNAMA
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