FITCH AFFIRMS MALAYSIAN RE’S ‘A’ INSURER FINANCIAL STRENGTH RATING WITH STABLE OUTLOOK

KUALA LUMPUR, Dec 10 (Bernama) -- Fitch Ratings has affirmed Malaysian Reinsurance Bhd’s (Malaysian Re) insurer financial strength (IFS) rating of ‘A’ (strong) with a stable outlook.

In a statement today, Malaysian Re said that the affirmation of the IFS rating reflects the company’s commitment to maintaining a strong capitalisation and sustaining its financial and earnings performance.

Meanwhile, Fitch Ratings said the affirmation also reflects Malaysian Re’s ‘moderate’ company profile and very strong capitalisation.

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“It (the rating) also takes into consideration challenges in managing potential volatility in underwriting performance as well as earnings dependence on local voluntary cessions,” it said in a separate statement.

Fitch Ratings said that Malaysian Re’s underwriting performance improved sharply in the financial year ended March 31, 2024 (FY2024), with an insurance and takaful service result of RM341 million, driven by lower catastrophe losses compared to a FY2023 loss of RM2 million.

“It has also benefited from tighter underwriting practices and favourable pricing conditions in recent years.

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“Net profit rose to RM388 million, from RM57 million in FY2023, as higher investment income was weighed down by a weaker insurance and takaful financial result,” it said.

Fitch Ratings said Malaysian Re’s underwriting profitability is supported by the profitable domestic voluntary cession business.

“It remains focused on managing the potential volatility of its domestic non-voluntary cession and overseas businesses, and we believe this will be key to maintaining stability in its overall underwriting performance,” it said.

Fitch Ratings said the assessment of Malaysian Re’s profile is based on a ‘moderate’ business profile and ‘neutral’ corporate governance compared to all other Malaysian insurers.

“It has an established and substantive domestic business franchise, which is balanced by its ‘least favourable’ operating scale relative to international peers.

“Malaysian Re holds a dominant position in Malaysia’s non-life reinsurance market and has also been diversifying to overseas markets,” it added.

Malaysian Re is a wholly owned subsidiary of MNRB Holdings Bhd (MNRB).

-- BERNAMA