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AM Best Affirms Credit Ratings of Etiqa General Insurance Berhad

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Etiqa General Insurance Berhad (EGIB) (Malaysia). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect EGIB’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM). In addition, the ratings factor in a neutral impact from the company’s ultimate majority ownership by Malayan Banking Berhad (Maybank group), one of the largest financial services groups incorporated, listed and domiciled in Malaysia.

EGIB’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which was at the strongest level at year-end 2022, as measured by Best’s Capital Adequacy Ratio (BCAR), and is expected to remain at that level over the near to medium term. AM Best views the company as having a moderate-risk investment strategy, which is made up of a combination of low-risk assets of cash, deposits and bonds, as well as higher-risk assets including equities and real estate. In addition, the company has a high dependence on reinsurance, with a net retention ratio of 33% in 2022. As a result, the company’s reinsurance recoverables are a large balance sheet item, equal to three times its shareholders’ equity at the end of 2022.

AM Best assesses EGIB’s operating performance as strong, with a five-year average combined ratio of 87% (2018-2022). Overall earnings have been supported by favourable underwriting performance and stable investment income. Low net loss experience in the company’s core business lines of fire and personal accident, as well as favourable reinsurance commission income from ceded risks, have been the key drivers of technical profitability over recent years. Although the ongoing phased liberalisation of motor and fire insurance pricing in Malaysia and the company’s business initiatives may constrain future underwriting margins, AM Best expects EGIB to maintain its strong operating performance over the medium term, underpinned by underwriting and pricing discipline.

AM Best views EGIB’s business profile as neutral. The company is a mid-sized non-life insurer in Malaysia, with a market share of over 8%, based on 2022 gross direct premium. The company’s underwriting portfolio is diversified moderately by line of business and distribution channel, albeit with all business originating from Malaysia. As part of the Maybank group, EGIB benefits from good distribution capabilities with preferential access to business through its parent’s banking network.

AM Best views EGIB’s ERM approach as appropriate given the current size and complexity of its operations. Risk management capabilities typically are considered appropriate relative to the profile of the company’s key risks, although reinsurance credit/dispute risk is viewed to be elevated given the company’s exposure to some non-rated reinsurance counterparties, including captives.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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