Stable outlook for Etiqa General Insurance: AM Best

Enterprise Risk Management (ERM) is deemed appropriate for the company’s capabilities.

Etiqa General Insurance Berhad (EGIB) is expected to keep a robust financial performance if underwriting is well maintained, AM Best said.

However, the ongoing pricing liberalisation in motor and fire insurance and business initiatives may impact underwriting margins.

Etiqa’s stable outlook reflects its strong balance sheet, characterised by solid risk-adjusted capitalisation.  The company’s moderate-risk investment strategy, including low-risk assets and a high dependence on reinsurance, contributes to its robust financial position.

EGIB's operating performance is assessed as strong, with a five-year average combined ratio of 87% (2018-2022). 

Favourable underwriting in core business lines and stable investment income support overall earnings. 

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The business profile is viewed as neutral, with EGIB being a mid-sized non-life insurer in Malaysia, holding a market share of over 8%. 

The company benefits from good distribution capabilities and access to business through its parent company, the Maybank group. Despite being solely Malaysia-focused, the company has a moderately diversified underwriting portfolio by line of business and distribution channel.

AM Best considers EGIB's Enterprise Risk Management (ERM) approach appropriate for its current size and complexity. 

Whilst risk management capabilities align well with key risks, the company faces an elevated reinsurance credit/dispute risk due to exposure to some non-rated reinsurance counterparties, including captives.