Tune Protect Re stabilises post-COVID with strong returns: AM Best

Its balance sheet is expected to remain solid in the medium term.

Tune Protect Re has improved its operating performance post-COVID-19, which previously caused volatility in premium growth and earnings, AM Best said.

With the normalisation of its travel insurance operations, the company has achieved more stable underwriting results. 

In 2023, TPR reported a robust combined ratio of 84.6% and a return on equity of 16.4%. Strong technical and investment performance has continued to support favourable results through the first three quarters of 2024.

Looking ahead, TPR’s balance sheet strength, assessed as strong by AM Best, is expected to remain solid over the medium term. 

This is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). 

Whilst the company’s modest capital base of $33m at the end of 2023 poses some exposure to volatility under stressed scenarios, its conservative investment portfolio, primarily in unit trust funds backed by fixed-income securities of good credit quality, helps mitigate these risks.

AM Best anticipates moderate underwriting growth for TPR over the medium term, leveraging its niche position as a reinsurer focused on travel insurance. 

The company benefits from its parent Tune Protect Group Berhad’s (TPG) technology platform, which facilitates policy distribution through partnerships with airlines and travel agencies.