Plus and minus points of HSBC Amanah Takaful

Fitch Ratings affirms HSBC Amanah Takaful's 'A-' Insurer Financial Strength rating with stable outlook, taking into account the following plus and minus points:

Plus

• Ability and willingness of HSBC group to provide support
• HSBC well-recognised brand name, product and distribution capabilities, management resources
• HSBC Amanah Takaful's healthy capitalisation, conservative investment mix, prudent management

Minus

• Limited track record
• Modest size
• Possible execution risks
• Competitive and evolving takaful environment
• Management of expenses in balance with growth
• Limited depth and breadth of Islamic bond market in Malaysia

Source: Business Times

"A-" for both Malaysian Re and Labuan Re

Fitch has affirmed "A-" rating of both Malaysian Re and Labuan Re.

Information on Malaysian Re:

• Largest reinsurance player in Malaysia
• 80% of business comes from Malaysia
• Holding company MNRB injected RM20 mil capital in April 2009
• Paid-up capital: RM500 mil
• Net income: RM40 mil (FY 3/2009), RM85.1 mil (FY 3/2008)

Information on Labuan Re:

• Owned by 11 Malaysian companies
• 22.5% of business from Malaysia
• Operating loss: US$5 mil (2008), profit: US$22.5 mil (2007)

Source: Business Times 1 & 2

Fitch cut AIG's ratings

AIG's issuer default rating was cut to "BBB" from "A" by Fitch.

Source: The Star

AIA to be split from AIG

AIA will be separated from AIG and put into a specially created separate legal entity, subject to regulatory approvals.

In a move to convince policyholders, AIA announced that it had a solvency ratio on a pro forma basis of >200% of regulatory requirements as of 30/11/2008 and with A+ rating from S&P.

Other statistics on AIA across 13 Asian markets:

• >US$60 bil assets under management
• >250,000 agents, >52,000 agents recruited in 2008
• 20,000 employees
• 20 mil customers

Meanwhile, 2 bidders (Prudential and Manulife) for AIA bidded well below AIG's target of US$20 bil. AIG will consider an IPO.

Source: The Star

BBB+ for MNRB Retakaful

Fitch assigns 'BBB+' Insurer Financial Strength (IFS) rating to MNRB Retakaful with stable outlook.

Factors considered for the rating were:

• MNRB Holdings Berhad's ability and willingness to provide support in times of need
• Catastrophe-free Malaysian market - the main focus of MNRB Retakaful's business
• Healthy capitalisation, prudent management
• Limited track record
• Modest size
• Possible execution risks

Source: Fitch