RAM Ratings has awarded its highest ‘aaa’ Labuan Entity Credit Assessment (LECA) rating to TNB Global Captive (TGC), based in the Labuan International Business and Financial Centre (IBFC).
The pure captive is a wholly-owned subsidiary of Tenaga Nasional Berhad (TNB), Malaysian national electric utility company.
Since its inception, TGC has demonstrated profitability, with a pre-tax profit of 21.8 million Malaysian ringgit (US$4.9 million) against insurance revenue of MYR185 million in 2023, reflecting its steady growth in assuming larger shares of insurable risks and premium retention.
The captive provides coverage for fire and perils, industrial all risks (IAR), machinery breakdown, and business interruption risks through group-wide and specific policies for TNB subsidiaries.
According to the rating agency, TGC has managed risk retention at a measured pace, controlling exposure to large risks from IAR and machinery breakdown coverage through modest retention, effectively mitigating losses from several large claims related to machinery damage, leakages, and floods over the 2023–2024 period.
Any increase in retention is expected to be balanced by growth in premiums captured by TGC, with due consideration for adequate solvency and cushion against potential losses.
RAM Ratings asserts that the captive maintains robust liquidity and strong capitalisation, with current risk retention well-supported by liquid assets and solvency capital requirement surpluses bolstered by consistent earnings accretion.
