A.M. Best has affirmed the financial strength rating of “A (Excellent)” and the issuer credit rating of “a” of Energas Insurance of Malaysia. The outlook for both ratings is stable.
According to the agency, Energas’s ratings reflect its strong capitalisation, comprehensive reinsurance protection and role as the sole captive insurance carrier for its ultimate parent, Petroliam Nasional Berhad (Petronas), an integrated global oil and gas company.
Full profit retention in the absence of dividend payments to Petronas has enabled Energas to grow its capital favorably since inception.
Energas’s financial performance is underpinned by its low operating cost structure and consistent investment profits.
Energas has a large investment portfolio comprising of solely cash and cash equivalents, providing a high level of liquidity and minimum investment risk exposure. Its comprehensive reinsurance program from a panel of high quality reinsurers limits Energas’s aggregate loss exposure.
Offsetting rating factors include claims volatility from a narrow scope of assumed risk and increased event retention, especially as premium rates in its main engineering line remain soft while insured values are increasing.
A.M. Best has stated that negative rating actions may arise from a material deterioration of Energas’s risk-adjusted capitalisation due to a material repatriation of capital.
