Fitch assigns 'A' rating to Etiqa Takaful's IFS

Fitch assigns 'A' rating to Etiqa Takaful's IFS
Business & Markets 2013
Written by Bernama
Monday, 09 September 2013 19:05

KUALA LUMPUR (Sept 9): Global rating agency, Fitch Ratings, has given an 'A' rating to Etiqa Takaful Bhd's insurer financial strength (IFS), with stable outlook.

"The rating reflects Etiqa's leading position in Malaysia's takaful market, extensive distribution coverage, operating history of 20 years, sound liquidity, and its favourable operating margins.

"The rating also recognises Etiqa's position as a core operating subsidiary within Maybank Ageas Holdings Bhd (MAHB)," Fitch Ratings said in a statement today.

Etiqa Takaful is a dominant player in the country's takaful market, capturing about 50 per cent of gross contributions in 2012 and 36 per cent of new business in the general and family takaful segments.

Wide agency coverage, along with its bancassurance arrangement with Maybank, have given Etiqa a competitive edge over its rivals, especially newly-formed takaful operators.

Under Fitch's criteria, Etiqa was rated above the sovereign's, given its leading market position in Malaysia and the capital strength of MAHB, but no more than one notch, due to its business focus in Malaysia.

Although Etiqa's risk-based capitalisation as measured by Fitch's capital model remained weak in financial year 2012, Fitch believes MAHB was able to fund Etiqa's capital requirement when the new capital regime for takaful operators come into effect.