AM Best Assigns Credit Ratings to Malaysian Life Reinsurance Group Berhad

AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Malaysian Life Reinsurance Group Berhad (Malaysian Life Re) (Malaysia). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Malaysian Life Re’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. In addition, the ratings factor in a neutral holding company impact from Malaysian Life Re’s majority ownership by the Life Insurance Association of Malaysia (LIAM) via L.I.A.M. Holding Sdn. Bhd.

Malaysian Life Re’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which was at the strongest level as of 31 December 2024, as measured by Best’s Capital Adequacy Ratio (BCAR). The company has adopted a conservative capital management approach that supports a prudent regulatory solvency position, and prospective risk-adjusted capitalisation is expected to be maintained at the strongest level over the medium term. AM Best views Malaysian Life Re’s investment strategy as generally conservative, with investment assets allocated to cash, deposits and fixed-income securities that are mostly well-rated. Malaysian Life Re’s balance sheet strength assessment also factors in a neutral holding company assessment, following AM Best’s review of LIAM.

AM Best assesses Malaysian Life Re’s operating performance as adequate. In recent years, the company’s earnings were driven by robust investment income, arising mainly from interest income and fair value gains from its bond investments. In 2024, Malaysian Life Re recorded a negative insurance service result, predominantly driven by the loss experience of the life and health reinsurance. Despite this, the company reported positive operating earnings with a return-on-equity ratio of 2.7%. Prospectively, AM Best expects Malaysian Life Re’s operating performance metrics to remain adequate, supported by an improved insurance service result.

AM Best assesses Malaysian Life Re’s business profile as neutral. The company is the sole domestic life reinsurer in Malaysia, with life, health and family retakaful business comprising its reinsurance operation. The company has a well-established market position in the Malaysia life reinsurance market. Malaysian Life Re benefits from its long-standing relationships with key cedants, who are also the members of LIAM, its ultimate parent, which supports the company’s competitive position in its domestic market. The company also benefits from underwriting and operational support from Reinsurance Group of America, Incorporated (RGA), its minority shareholder. In recent years, Malaysian Life Re exhibited moderate underwriting growth, partly driven by the health and group life reinsurance segments.

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 AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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