RAM Ratings assigns a+ LECA™ rating to Swap Captive

Published on 08 Apr 2022.

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RAM Ratings has assigned a LECA™ rating of “a+” to Swap Captive Insurance Limited (SCIL or the Captive), a licensed Labuan captive insurer. The rating indicates the Captive has adequate capacity to meet policyholder obligations and financial commitments, with the + suffix indicating a placement at the upper end of the rating category.

Incorporated in 2017, SCIL provides device protection insurance to customers sourced from the business network of related companies – Swap Logistics Distribution Sdn Bhd and Swap Device Solutions Sdn Bhd (collectively, Swap Group). Swap Group is a distributor of mobile telecommunication products and a fourth-party logistics (4PL) supply chain solution provider in Malaysia. SCIL has also provided commercial insurance coverage for Swap Group’s distribution operations, which it is presently winding down. Thus, our assessment mainly considers the device protection operations in Malaysia. 

SCIL’s rating is anchored by strong underwriting performance. Claim incidences are low and liabilities are short-tailed (mostly settled within a few business days). The Captive has a profitable track record. Over the last 3 years, SCIL’s combined ratio has stayed below 50% against gross premiums of approximately RM40 mil. The Captive has a conservative liquidity profile and its solvency position, adequate to meet regulatory requirements.

At present, SCIL’s subscriber base is supported by an exclusive partnership with a major telco in Malaysia. This anchors the Captive’s stable premiums and profitability. Conversely, this reliance underscores SCIL’s dependence on contract renewals and exposes SCIL to the significant risk of a single counterparty, although the Group’s partnership with the telco has been well in place for more than a decade.  Traditionally low take-up rates of mobile insurance is another factor limiting present premium growth.

LECA™ is an assessment service from RAM Rating Services Berhad for companies based in the Labuan International Business and Financial Centre. LECA™ ratings are typically valid for up to 1 year after they are assigned. During this time, the assessment will be monitored by RAM Ratings and any material developments could change the rating assigned. 

For information on LECA™ ratings assigned, visit https://analytics.ram.com.my/LECARating


Analytical contact
Joanne Kek
(603) 3385 2520


LECA™ ratings are not an opinion of a company’s specific financial obligations and terms thereof nor the legality and enforceability of the same, nor does it involve any audit by RAM Ratings. The information herein is strictly for information purposes and is not an offer, recommendation, solicitation or advice to buy or sell any investment product, securities or instruments, nor intended to be used as a recommendation to enter into, continue, suspend or terminate any contractual or financial obligation. Nothing in this publication constitutes accounting, legal, regulatory, tax, financial or other investment advice by RAM Ratings. 

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