A.M. Best Affirms Credit Ratings of Tune Protect Re Ltd.

SINGAPORE--(BUSINESS WIRE)-- A.M. Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” of Tune Protect Re Ltd. (TPR) (Malaysia), a wholly owned subsidiary of Tune Protect Group Berhad (TPR). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect TPR’s balance sheet strength, which A.M. Best categorizes as strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

The company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is supported by low underwriting leverages and improved asset quality. As an affiliate of AirAsia Berhad and its associates (AirAsia Group), TPR was able to access a profitable travel insurance portfolio through its distribution partners. This has enabled TPR to achieve a solid earnings track record, as demonstrated by a five-year average combined ratio of nearly 53%. Despite TPR’s strong profitability, combined ratios have trended upward due to higher expenses and lower than expected premiums.

Offsetting rating factors include TPR’s limited business profile given its narrow market focus as a single product reinsurance company, and its dependence on AirAsia Group, which exposes the company to significant concentration risks. Although TPR has introduced various initiatives to seek growth in new business segments, A.M. Best expects the company to face execution risk associated with its expansion plans.

Positive rating actions are unlikely in the near term. Negative rating actions may occur from a deterioration in operating performance or AirAsia Group’s financial strength.

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 A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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A.M. Best

Faith Tan, +65 6303 5017

Financial Analyst

faith.tan@ambest.com

or

Chi-Yeung Lok, +65 6303 5018

Director, Analytics

chi-yeung.lok@ambest.com

or

Christopher Sharkey, +1 908 439 2200, ext. 5159

Manager, Public Relations

christopher.sharkey@ambest.com

or

Jim Peavy, +1 908 439 2200, ext. 5644

Director, Public Relations

james.peavy@ambest.com

Source: A.M. Best