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

The ratings reflect Malaysian 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.

Malaysian Re’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which is expected to remain at the strongest level over the medium term as measured by Best’s Capital Adequacy Ratio (BCAR). The company has good financial flexibility, as demonstrated by its historical subordinated debt issuances. In addition, AM Best views the company’s investment portfolio as generally conservative, whereby the majority of investments are allocated to term deposits, government bonds and good quality corporate bonds. However, Malaysian Re is subject to catastrophe risk exposures from both its domestic and overseas portfolios, although this risk is mitigated partially by the use of retrocession coverage through well-rated counterparties.

AM Best assesses Malaysian Re’s operating performance as adequate, supported by positive operating results over the past five years. The company reported a return-on-equity ratio of 13.5% in fiscal year 2025 (ended 31 March 2025), and earnings remained robust in the first half of fiscal year 2026. The company’s underwriting performance has improved in recent years, mainly attributed to its ongoing business remodelling programme, portfolio remediation measures and benign catastrophe losses. In addition, the company’s investment income, which comprised mainly interest and dividend income, continues to support overall profitability. Prospectively, AM Best expects Malaysian Re to maintain prudent underwriting discipline amid softening reinsurance market conditions.

Malaysian Re is the largest non-life reinsurer in Malaysia, with a dominant share of its domestic reinsurance market. The company benefits from a mandatory domestic reinsurance cession arrangement, which provides it with access to a steady stream of domestic reinsurance business. AM Best views Malaysian Re’s underwriting portfolio to be well-diversified by geography and line of business. Future business growth is expected to be largely supported by strategic expansion into overseas markets and non-traditional segments.

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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