A.M. Best Assigns Ratings to Malaysian Reinsurance Berhad.OLDWICK, N.J. -- A.M. Best Co. has assigned a financial strength rating of A- (Excellent) and an issuer credit rating (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "a-" to Malaysian Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. Berhad (Malaysian Re). The outlook for both ratings is stable. The ratings reflect the company's excellent underwriting performance with limited volatility, well-established presence in the insurance market in Malaysia and low catastrophe exposure. Malaysian Re has an excellent underwriting performance. The company has consistently achieved an underwriting profit Underwriting profit is a term used in the insurance industry. It consists of the earned premium remaining after losses have been paid and administrative expenses have been deducted. It does not include any investment income earned on held premiums. over the past ten years. Malaysian Re invests over 50% of its total assets in cash and fixed income securities which have provided a stable income stream. A double digit return on equity over the past five years has also demonstrated the strong profitability of the company. With over thirty years of operating history in the region, the company has established a strong relationship with the ceding cede tr.v. ced·ed, ced·ing, cedes 1. To surrender possession of, especially by treaty. See Synonyms at relinquish. 2. companies in Malaysia. The company has recorded over 50% reinsurance market share in Malaysia. Malaysian Re has maintained a low catastrophe exposure. The company limits its catastrophe exposure to a single event at 5% of its capital & surplus. The company has recorded only two events with net claims paid of over RM 10 million (USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 3 million) since its inception in 1973. As of year end of fiscal year 2005, the company's capital and surplus stood at RM 487 million (USD 129 million). Offsetting factors include the revision of voluntary cession The act of relinquishing one's right. A surrender, relinquishment, or assignment of territory by one state or government to another. The territory of a foreign government gained by the transfer of sovereignty. CESSION, contracts. and the capital needs of its holding company. Malaysian Re generates over 50% of its premium income from voluntary cessions agreements with ceding companies in Malaysia which require the ceding companies to cede 4-5% of their business to Malaysian Re. At the last revision of the voluntary cessions in fiscal year 2003, Malaysian Re experienced a sharp decline in gross premium income, but the corresponding reduction in the net premium income was marginal as the requirement to retrocede ret·ro·cede v. ret·ro·ced·ed, ret·ro·ced·ing, ret·ro·cedes v.intr. To go back; recede. v.tr. To cede or give back (a territory, for example); return. a portion of the voluntary cessions back to the industry was no longer applicable. The next revision will be in 2007. The company expects that the current 4-5% will be further lowered. The revision will have a negative impact to the company. MNRB Holdings Berhad, the parent company of Malaysian Re, is now expanding its Takaful | Takaful is an Islamic insurance concept which is grounded in Islamic muamalat (banking transactions), observing the rules and regulations of Islamic law. and Re-takaful business in Malaysia. The current and future capital needs to support the expansion of the other subsidiaries of MNRB Holdings Berhad may exert pressure on the capitalization of Malaysian Re. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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