AM Best affirms Tune Protect Re Ltd's credit ratings

KUALA LUMPUR, Nov 14 (Bernama) -- Global credit rating agency AM Best has affirmed the financial strength rating of “B++” (Good) and the long-term issuer credit rating of “bbb” (Good) of Malaysian reinsurer Tune Protect Re Ltd (TPR).

The outlook of these credit ratings is stable, reflecting TPR’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

In a statement, the rating agency said TPR’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation that is expected to remain at the strongest level over the medium term, as measured by Best’s Capital Adequacy Ratio.

In AM Best’s view, the reinsurer has a moderate risk investment strategy with investment assets predominantly held in unit trust funds, whereby the underlying assets are mainly fixed-income securities with good credit quality.

AM Best said that its balance sheet strength analysis also incorporates a neutral holding company impact following an assessment of consolidated risk-adjusted capitalisation of TPR’s parent group, Tune Protect Group Bhd (TPG).

Meanwhile, TPR’s operating performance is “adequate,” AM Best said.

“While TPR’s revenue and operating earnings were impacted adversely amid the COVID-19 pandemic, the company has been able to grow its premium base through geographical expansion and new business partners in recent periods,” it said.

It added that TPR is expected to achieve moderate revenue growth and robust operating earnings over the medium term, driven by the recovery of air travel and new product initiatives.

AM Best assessed TPR’s business profile as limited given its position as a niche reinsurer with a focus on travel-related insurance products.

TPR leverages TPG’s in-house technology platform to support and distribute policies in collaboration with corporate partners including airlines and travel agencies.

-- BERNAMA