KUALA LUMPUR, Nov 30 (Bernama) -- A.M. Best -- a global rating and information provider with a unique focus on the insurance industry agency -- has revised the outlooks to negative from stable of Labuan Reinsurance (L) Ltd (Labuan Re) Malaysia.
The revision of the outlooks to negative reflects the agency’s concern over the company’s ability to maintain its adequate operating performance, amidst challenging market conditions as it faces execution risk in remediating its underwriting portfolio.
A revision of the outlooks to stable could occur if Labuan Re can substantially improve and sustain its underwriting performance while maintaining its solid risk-adjusted capitalization, a statement said.
In the same statement, A.M. Best also has affirmed Labuan Re’s Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of ‘a-’.
The ratings reflect its balance sheet strength which A.M. Best categorized as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The company Lloyd’s business which generates about half of its premiums has been impacted by large claims events in 2017 and 2018 whereby its domestic business also was impacted by several large fire losses.
It has decided to review its participation in several of the Lloyd’s syndicates and also will re-examine the composition of its non-Lloyd’s portfolio. However, execution risk will be present as the company adjusts its portfolio.
A.M. Best commented that negative rating actions could occur if there is no considerable improvement in the company’s underwriting results or if the company’s business profile weakens. More details on www.ambest.com.
-- BERNAMA
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