SINGAPORE--(BUSINESS WIRE)--A.M. 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 positive.
The rating affirmations reflect Malaysian Re’s strong balance sheet, good business profile and good overall profitability. The company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is supported by low underwriting leverage and sound asset quality. Malaysian Re’s business profile and operating performance continue to benefit from its domestic portfolio, which is supported by regulated cessions.
An offsetting rating factor is the downward trend in regulated cession levels. Regulated cession levels are reviewed on an annual basis with the expectation that they will eventually be removed completely. In response, the company has sought to grow bilateral relationships in its domestic market and seek growth in select overseas markets. While profitable overall, this has increased the company’s catastrophe exposure, and underwriting results from its overseas portfolio have been more volatile.
Positive rating actions could occur if Malaysian Re maintains its business profile and achieves sustained profitability from its domestic and overseas business as the volume of voluntary cessions tapers off. Negative rating actions could result from deterioration in the company’s 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 Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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