RAM Ratings affirms Syarikat Takaful Malaysia Keluarga’s AA2 financial strength rating

Published on 17 Aug 2026.

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RAM Ratings has affirmed the AA₂/Stable/P1 financial strength ratings of Syarikat Takaful Malaysia Keluarga Berhad (STMKB or the Group), and the AA₃/Stable rating of the Group’s RM1 billion Tier-2 Subordinated Sukuk Wakalah Programme (2025/-). The one-notch differential between the financial strength rating and the AA₃ sukuk rating reflects the status of the notes as unsecured and subordinated obligations of the Group.

The rating affirmation reflects our expectation that STMKB will maintain its market leadership in the takaful sector, while preserving sound earnings generation, strong capital buffers, and conservative investment strategy. The ratings also consider distributor concentration risk arising from STMKB’s bancatakaful-led distribution strategy, which is less diversified than an agency-led model and exposes new business (NB) volumes to a narrow pool of banking partners. This risk is partly mitigated by the Group’s relationships with a panel of preferred bancatakaful partners, though NB will remain driven by the financing growth strategies of its respective partners.

The Group has an entrenched franchise in the domestic takaful industry, having contributed over 20% of the family takaful segment’s NB and the general takaful segments’ gross contributions in the last few years. Within the broader life and family takaful sector, STMKB commands an 11% share of total NB in 2025, placing it among the mid-sized players and the top two bancassurance/bancatakaful operators. In the non-life industry where the Group operates through Syarikat Takaful Malaysia Am Berhad (STMAB), it has a comparatively modest franchise, with 5% share of the sector’s combined premiums/contributions.

STMKB’s business and earnings profile will continue to be skewed towards single-contribution products in the near term, given its strong bancatakaful franchise where credit takaful remains the key contributor to NB. We view positively its ongoing efforts to grow the regular-pay segment as this should enhance earnings diversification and continuity over time, although meaningful gains will take time to materialise.

STMKB’s profitability is robust relative to peers, with an average pre-tax return on assets of 4.0% in the last three years. It delivered pre-tax earnings of RM616 mil in 2025 (+7% y-o-y; 2024: RM575 mil), driven by sustained growth across its domestic family and general takaful segments, a larger release of contractual service margin (CSM) and stronger investment income. Earnings momentum remained intact in 3M 2026, with pre-tax profit rising 5% to RM158 mil (3M 2025: RM151 mil), led by a higher CSM release.

The Group’s sound earnings accretion is supportive of its capital strength. Capital buffers stayed healthy despite some easing in the Group’s and STMAB’s capital levels, with the Group expecting to maintain company-level capital adequacy ratios comfortably above the entities’ respective individual target capital levels. A sustained decline in capital adequacy, weaker earnings retention or more aggressive capital management could reduce rating headroom.

 

Analytical contacts
Loh Kit Yoong
(603) 2708 8285
kityoong@ram.com.my

Sophia Lee
(603) 2708 8211
sophia@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my

 

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