KUALA LUMPUR, Nov 4 -- AM Best has affirmed the Financial Strength Rating of A (excellent) and Long-Term Issuer Credit Rating of ‘a’ of Lonpac Insurance Bhd (Lonpac) Malaysia.
The stable outlook of these credit ratings reflects Lonpac’s balance sheet strength, which AM Best categorised as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
The global credit rating agency in a statement said, despite an elevated dividend payout ratio over the past five years, Lonpac has exhibited strong capital growth from retained earnings.
It has a typically conservative investment strategy with focus on cash and high-quality fixed interest securities, despite some concentration in invested assets to Malaysian financial institutions.
AM Best views Lonpac’s operating performance to be strong as the company reported a five-year average return on equity ratio of 34.2 per cent and combined ratio of 65.9 per cent (2014-2018).
The company continues to enhance its pricing and risk selection capabilities, as well as strengthen its distribution and product design; all aimed at maintaining strong underwriting and operating performance metrics.
As a mid-sized non-life insurer in Malaysia, Lonpac continues to benefit from a long-standing relationship with Public Bank Bhd, which provides the company with preferential access to profitable property business through the banking channel.
Despite slow premium growth in Malaysia’s non-life market over the past few years, the company has continued to increase its market share while maintaining good profitability.
-- BERNAMA
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