KUALA LUMPUR, Sept 27 (Bernama) -- Malaysia’s Lonpac Insurance Bhd (Lonpac) financial strength rating has been upgraded by A.M. Best to A (excellent) from A- (excellent) and the long-term issuer credit rating to ‘a’ from ‘a-’.
A.M Best said the outlook of these ratings has been revised to stable from positive.
The ratings reflect Lonpac’s balance sheet strength, which A.M. Best categorised as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
The global rating agency also said in a statement that the upgraded rating reflect Lonpac’s consistent capital growth, underpinned by strong operating results that compare favorably against peers.
The company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is supported by good internal capital generation and low underwriting leverage.
The insurance company’s operating performance has been consistently strong, driven by solid underwriting profits and stable investment returns.
Lonpac’s operating performance has exhibited a relatively low level of volatility.
Offsetting rating factors include phased liberalization of Malaysia's fire and motor lines, which could erode underwriting margins in Lonpac’s key fire business line. Currently, the fire business segment is largely tariff driven with limited flexibility for price adjustments.
A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. More details on www.ambest.com
--BERNAMA
--BERNAMA
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