AM Best Downgrades Credit Ratings of Energas Insurance (L) Limited

MARCH 12, 2026 10:30 AM (EDT)

AM Best Downgrades Credit Ratings of Energas Insurance (L) Limited

CONTACTS:

FOR IMMEDIATE RELEASE

SINGAPORE - MARCH 12, 2026 10:30 AM (EDT)
AM Best has downgraded the Financial Strength Rating to A- (Excellent) from A (Excellent) and the Long-Term Issuer Credit Rating to "a-" (Excellent) from "a" (Excellent) of Energas Insurance (L) Limited (ENERGAS) (Malaysia). The outlook of these Credit Ratings (ratings) has been revised to stable from negative.

The ratings reflect ENERGAS' balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. In addition, the ratings factor in neutral impact from the parent company, Petroliam Nasional Berhad (Petronas), which is the national oil and gas company of Malaysia.

The rating downgrades reflect a trend of deterioration and increased volatility in ENERGAS' operating performance in recent years, with higher-than-expected frequency of large losses resulting in large underwriting deficits for the company. Underwriting performance in 2025 remained negatively impacted by adverse loss experience, soft market conditions and reserve strengthening, although ongoing portfolio remediation measures are expected to support earnings recovery over the medium term. Investment performance remains as a robust positive contributor to overall earnings and is expected to remain as a key contributor to the company's bottom line over the medium term.

ENERGAS' balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, as measured by Best's Capital Adequacy Ratio (BCAR), which is expected to be at least at the very strong level over the medium term. AM Best views ENERGAS' investment portfolio as conservative, with a majority of investments allocated to cash and deposits, and the remainder invested in good quality government and corporate bonds. The company's high reliance on reinsurance to manage its risk accumulation is an offsetting balance sheet factor, which makes it susceptible to changes in the availability and costs of reinsurance capacity.

AM Best assesses ENERGAS' business profile as neutral. As a single-parent captive to Petronas, ENERGAS benefits from business access to the group's insurance risks. However, the company's underwriting portfolio shows concentration by line of business and geography, with a significant focus on upstream and downstream energy risks located in Malaysia.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best's Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activityweb page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings (BCR), Best's Performance Assessments (PA), Best's Preliminary Credit Assessments (PCA) and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.