Performance will normalise once the pandemic subsides.
Malaysian Reinsurance’s selective underwriting process and results monitoring of its international portfolio will eliminate unprofitable accounts, said a Fitch Ratings report.
The pandemic may put pressure on its profitability but its fundamental operating profile will remain intact and performance will return to normal once the crisis subsides.
The reinsurer’s investment strategy is generally conservative and liquid with the majority of its investments in cash, deposits and fixed-income instruments. Its risky assets ratio is about 41%, whilst its sovereign investment-to-capital ratio was estimated to be 43% at H1 FY2021.
In addition, it has an established substantive domestic business franchise, although this is balanced by its “least favourable” operating scale and somewhat geographically diversified business compared with global peers.
Malaysian Reinsurance’s market franchise is sustainable, supported by robust branding and continued support from local cedants as part of a regulated cession arrangement. The reinsurer also participates in various local industry initiatives to strengthen its business relationships with cedants, the report added.
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