RAM Ratings reaffirms MNRB’s and Malaysian Re’s ratings

Published on 02 Feb 2023.

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RAM Ratings has reaffirmed the ratings of MNRB Holdings Berhad (MNRB or the Group) and Malaysian Reinsurance Berhad (Malaysian Re), as listed in Table 1.

Table 1: Ratings of MNRB and Malaysian Re



MNRB Holdings Berhad


  1. RM320 million Sukuk Murabahah Programme (2019/-)
  • Senior sukuk
  • Subordinated sukuk




Malaysian Reinsurance Berhad


  1. Insurer Financial Strength Ratings
  1. RM250 million Subordinated Medium-Term Note Programme (2015/2030)
  1. RM800 million Medium-Term Notes Programme (2022/-)
  • Senior notes
  • Subordinated notes







The rating action considers MNRB’s strong market position in the domestic reinsurance space through wholly owned subsidiary, Malaysian Re, and the adequate capitalisation of its operating subsidiaries. Although Malaysian Re is still its largest earnings contributor (50%-80% of pre-tax profits in the last five years), the Group’s takaful operations – especially the non-life business – have garnered healthy growth momentum in recent years. Meaningful growth in the takaful subsidiaries could increase the stability of MNRB’s earnings in the long run, given the susceptibility of the reinsurance unit to large claims. 

MNRB’s ratings also reflect the subordination of its creditors to the policyholders and creditors of its regulated operating entities, as well as moderate leverage at the holding company level. MNRB’s gearing and double leverage ratios remained well within the rating limits at 0.3 times and 1.1 times, respectively, as at end-September 2022 (rating thresholds: 0.5 times and 1.4 times). The capital adequacy ratios of the Group’s main subsidiaries were still sufficiently above their respective individual target capital levels and the regulatory minimum of 130% as at end-September 2022.

Despite profit improvements in recent years in tandem with the growth traction of its subsidiaries, the Group is subject to some degree of earnings variability in view of the reinsurance unit’s susceptibility to large claims and, to a lesser extent, the ability of the takaful units to sustain their growth momentum. MNRB registered healthy topline growth in FY Mar 2022 (net earned premiums: +12% y-o-y; FY Mar 2021: +16%) but pre-tax profit almost halved to RM127.5 mil (FY Mar 2021: RM223.2 mil) owing to heftier claims from Malaysian Re and dampened investment returns, to a smaller degree. The claims include large losses from floods in Malaysia and across several European countries. Pre-tax profit dropped to RM15.1 mil in 1H fiscal 2023 for similar reasons (1H fiscal 2022: RM97.8 mil), with the impact of investment losses (mostly marked-to-market movements amid monetary policy normalisation) being more significant. 

MNRB and Malaysian Re were sufficiently liquid, with liquid assets well exceeding their short-term financial obligations as at end-March 2022, supported by sizeable pools of term deposits (41% and 58% of total invested assets, respectively, as at end-September 2022). Malaysian Re’s reserve coverage also stayed sound, with a net technical reserve ratio of 165% as at end-September 2022, unchanged from end-March 2021.

Analytical contacts
Loh Kit Yoong
(603) 3385 2493

Sophia Lee
(603) 3385 2619


The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
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Ratings on MNRB Holdings Berhad