Petronas insurer granted excellent rating by AM Best

KUALA LUMPUR: Sole captive insurer of Petroliam Nasional Bhd (Petronas), Energas Insurance (L) Limited (Energas) has been affirmed to have Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of ‘a’.

AM Best which affirmed the company’s ratings said in a statement the outlook of these credit ratings was stable.

The ratings reflect Energas’ balance sheet strength, which AM Best classified as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

In addition, the ratings factor a neutral impact from the company’s 100 per cent ownership and integration with Petronas, Malaysia’s national oil and gas company. AM Best expects Energas’ risk- adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, to remain at the strongest level over the medium term, supported by its low underwriting leverage and conservative investment approach.

Moreover, the company’s low operating costs and steady stream of reinsurance commission income have contributed to its overall profitability.

Prospective results are subject to volatility in claims experience, as Energas provides large policy limits compared with its premium income. However, this should be moderated partially by the captive’s comprehensive reinsurance programme.

Energas is well- integrated within the Petronas group’s risk management framework and has an active role in overseeing and containing the group’s insurance costs. — Bernama