AM Best has affirmed the financial strength rating (FSR) of A (Excellent) of Energas Insurance (Energas) (Malaysia).
The outlook for the rating is stable. Energas is a sole captive of Petroliam Nasional Berhad (Petronas), the national oil and gas company of Malaysia.
AM Best said the rating reflects Energas’ strong risk-adjusted capitalisation, which is supported by a comprehensive reinsurance programme and prudent investment portfolio comprised solely of cash and cash equivalents.
The rating also considers Energas’ excellent earnings track record owing to an efficient operating structure and favourable claims experience, said the rating firm. As an integral part of Petronas’ commercial operations, Energas is able to leverage Petronas’ market dominance, which has kept claims experience low.
Offsetting rating factors include claims volatility from a limited scope of assumed risk and a smaller premium base as Petronas scales back on capital expenditures, according to AM Best. However, the firm said that Energas is well-positioned at its current rating level.
Negative rating actions may arise from a material deterioration of Energas’ risk-adjusted capitalisation due to a material repatriation of capital.
AM Best, Ratings, Energas, FSR, Petronas, Asia-Pacific