Kurnia Malaysia
MARC reaffirms Kurnia's insurance financial strength rating at A+
THE STAR - Thursday, May 11th, 2006
KUALA LUMPUR, May 11 (Bernama) -- Malaysian Rating Corp Bhd (MARC) has reaffirmed
Kurnia Insurans (Malaysia) Bhd's financial strength rating at "A+".
It said the reaffirmation reflects Kurnia's expanding share of the local general
insurance market, its ability to maintain its leadership position in the motor
insurance segment and the realisation of its premium growth target.
"However, Kurnia's high business concentration on motor insurance continues
to be a moderating factor given the segment's increasingly challenging operating
environment," MARC said in a statement Thursday.
In 2004/2005, MARC said Kurnia increased its market share to 14.50 percent
(2003/2004: 13.9 percent) and 23.9 percent (2003/2004: 23.6 percent) of the
industry's total net premiums and motor net premiums respectively, maintaining
its position as the largest general and motor insurer in the country.
"This is in line with the company's goal of achieving a 30 percent share of
the local general insurance market by 2010," it said.
As for the business operations, it said Kurnia's overall underwriting profit
increased substantially (by 415.3 percent to RM159.5 million) owing to increased
earned premium income and a smaller increase in unearned premium reserve.
MARC said the increase in earned premium income led to a marked improvement
in overall claims ratio to 59 percent (FY2004: 68 percent).
Total shareholders' funds increased considerably by 19.1 percent to RM491.4
million due to higher net profit during the year, it added.
On the business outlook, MARC anticipated the near-term outlook to remain
challenging as the motor insurance business shows signs of softening with continuing
inflationary pressure, rising interest rates and high fuel prices.