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 Energas Insurance (L) Limited (Energas) (Malaysia). The outlook of these Credit Ratings (ratings) is stable.
Energas is the sole captive insurer of Petroliam Nasional Berhad (Petronas), Malaysia’s national oil and gas company.
The ratings reflect Energas’ balance sheet strength, which A.M. Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
The ratings also incorporate Energas’ solid risk-adjusted capitalization, comprehensive reinsurance program and historically strong operating performance, evidenced by a five-year average combined ratio of approximately 53%.
Partially offsetting these positive rating factors is a reduction in prospective earnings derived from smaller premium volumes as Petronas scales back on its upstream activities. Nonetheless, A.M. Best expects Energas’ active cycle management and efficient cost structure to buffer some of the negative pressure on its combined ratio and to aid in keeping overall earnings positive.
Positive rating actions are unlikely in the near term. Negative rating actions may arise if there is material deterioration of Energas’ operating performance or risk-adjusted capitalization in the event of repatriation of capital.
A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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