SINGAPORE--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Lonpac Insurance Bhd (Lonpac) (Malaysia). The outlook on both ratings is stable.
The ratings acknowledge Lonpac’s excellent operating performance and strong business profile. Risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio has strengthened on the back of lower underwriting leverage.
Lonpac’s affiliation with Public Bank Berhad and ability to defend its distribution channels has enabled the company to access profitable segments of the market. This has underpinned Lonpac’s market position in a competitive landscape driven by market consolidation.
Offsetting rating factors include the expected liberalization of Malaysia’s fire line, which is the main contributor to Lonpac’s underwriting profits. Positive rating actions could occur if Lonpac is able to achieve its current business plan as Malaysia’s fire line is liberalized. Downward rating action could arise from a trend of material deterioration in profitability.
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
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