RAM Ratings assigns highest LECA rating of aaa to TNB Global Captive

Published on 31 Dec 2024.

RAM Ratings has assigned its highest “aaa” LECA rating to TNB Global Captive (L) Ltd (TGC or the Captive), indicating a superior capacity to meet policyholder obligations and financial commitments. TGC, a pure captive insurer in Labuan IBFC is a wholly-owned subsidiary of Tenaga Nasional Berhad (TNB or the Group), Malaysia’s national electric utility.

TGC has been profitable since its inception in 2018, growing steadily as it assumes larger shares of insurable risks and premium retention. In FY23, the Captive recorded pre-tax profit of RM21.8 mil against insurance revenue of RM185 mil. Its coverage includes fire and perils, industrial all risks (IAR), machinery breakdown and business interruption risks through Group-wide and specific policies for TNB subsidiaries.

Risk retention has grown at a measured pace. TGC’s exposure to large risks from IAR and machinery breakdown coverage is controlled through modest retention. This has effectively mitigated losses from several large claims related to machinery damage, leakages and floods over the 2023 – 2024 period. Any increase in retention is expected to be balanced by growth in premiums captured by TGC, with due consideration for adequate solvency and cushion against potential losses.

TGC has robust liquidity and strong capitalisation. Its current risk retention is well-supported by liquid assets, while solvency capital requirement surpluses have been bolstered by consistent earnings accretion. TNB’s commitment to the Captive is reflected in a formal undertaking of financial support and the Group’s resilient operating and financial performance provides financial backing.

LECA is an assessment service from RAM Rating Services Berhad for companies based in Labuan IBFC. LECA ratings are typically valid for up to 1 year after they are assigned. The rating could be updated or changed upon the availability of material information, or in the event of material developments or changes in circumstances. TGC’s full LECA report can be obtained from the rated entity.

For more information, visit https://analytics.ram.com.my/LECARating.

Analytical contact
Joanne Kek
(603) 3385 2520
joanne@ram.com.my

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.

RAM Ratings reserves the right to add, remove, withdraw, amend or revise, as it deems fit and without prior notice to users, any detail related to any company for whom it has produced a LECA® rating and report. Although every reasonable care has been taken to ensure the accuracy, completeness and objectivity of the information contained herein, RAM Ratings makes no representation or warranty, whether express or implied, as to its accuracy, completeness and objectivity and accept no responsibility or liability relating to any losses or damages (direct or indirect) howsoever suffered by any person arising from any reliance on the analysis, views or information contained in this publication.

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RAM Ratings assigns highest LECA rating of aaa to TNB Global Captive