Yuchengco-led Malayan Insurance, a non-life insurer, received a “stable” outlook from global insurance rater A.M. Best after sustained growth in motor insurance premiums.

The insurer was also given a “good” rating or “B++” for financial strength.

“Despite the current economic landscape, we remain vigilant in ensuring that we can support the needs of our clients in any situation,” Malayan Insurance president and chief executive officer Paolo Abaya said.

In a statement to the media, Malayan said the stable outlook is backed by the firm’s improved risk-adjusted capitalization and continued reinsurance settlements.

Spending restraint

Economists said consumers have exercised some restraint in spending post-pandemic due to still elevated inflation rates at 3 percent to 4 percent generally and high interest rates of over 6 percent.

Despite these, Malayan Insurance also received a “superior” rating of “aa+” based on the Philippines National Scale Rating.

Malayan attributed the positive ratings to strong demand for motor insurance, while claims and rates for property insurance required a more cautious approach.

“Although natural catastrophes and significant loss events affected its core commercial lines, the rating agency said that motor business continued to bolster underwriting results,” Malayan said.

Malayan Insurance chief underwriting officer Eden Tesoro said the company has been intensifying its financial literacy program to support its various protection products.

“In difficult economic situations, I think insurance has even more value because you risk bigger. And when you get hit, the ability to get out of that financial hit is weak as your resources are already depleted,” she told DAILY TRIBUNE in an interview last year.

Tesoro said reinsurance costs have increased by 50 percent this year as recent natural calamities signal higher risks for reinsurers. She said non-life insurers in typhoon and earthquake-prone countries like the Philippines have felt the brunt from the price movement.

“Pricing has to reflect the cost of operations. Otherwise, it’s not going to be sustainable,” she stressed.

Citing A.M. Best’s evaluation report, Malayan said that the ratings confirmed Malayan Insurance’s strong balance sheet, as well as its adequate operating performance, neutral business profile, and appropriate enterprise risk management.

“Investment income drove Malayan’s overall earnings,” the company added.