AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) for Malaysian Reinsurance Berhad (Malaysian Re), with a stable outlook for both ratings.
This marks another endorsement of the reinsurer's financial stability, mirroring a recent move by Fitch Ratings, which also affirmed the company’s Insurer Financial Strength (IFS) rating of 'A' (Strong) with a stable outlook.
The rating agency cited Malaysian Re’s “very strong” balance sheet, adequate operating performance, neutral business profile, and appropriate enterprise risk management as key drivers for the affirmation.
Furthermore, Malaysian Re’s risk-adjusted capitalization is expected to remain at the strongest level over the medium term, as measured by Best’s Capital Adequacy Ratio (BCAR).
The reinsurer has maintained good financial flexibility through historical subordinated debt issuances and a conservative investment portfolio heavily allocated to term deposits and government bonds.
While the company faces catastrophe risk from its domestic and overseas operations, AM Best noted that this exposure is mitigated by retrocession coverage with well-rated counterparties.
Steady stream of business
As the largest non-life reinsurer in Malaysia, the company benefits from a mandatory domestic cession arrangement, which provides a steady stream of business.
Looking ahead, AM Best expects Malaysian Re to continue its expansion into overseas markets and non-traditional segments.
This strategic growth was recently demonstrated when Malaysian Re led the establishment of the ASEAN Renewable Energy Pool, signaling its continued push to maintain underwriting discipline amid evolving market conditions while advancing its environmental, social, and governance (ESG) goals.
On the performance front, Malaysian Re reported a return-on-equity ratio of 13.5% for the fiscal year ending March 31, 2025. The momentum has only continued through the first half of fiscal year 2026.
Malaysian Re’s ongoing investments in digital transformation and a self-service online platform are also expected to enhance customer-centricity and drive long-term value creation.
