tag:blogger.com,1999:blog-29462482.post5879611148738000128..comments2023-10-17T15:46:53.662+08:00Comments on nexttrade: MNRB- bottom-line improvedAlex Luhttp://www.blogger.com/profile/08920196030603399063noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-29462482.post-50907020641112328612012-09-04T10:12:15.310+08:002012-09-04T10:12:15.310+08:00Hi Alex,
Thanks for the explanation. MNRB total r...Hi Alex,<br /><br />Thanks for the explanation. MNRB total re-insurance profile has increased from 978mil in 2008 to 1,432 mil in 2011. Also the total asset has increased in tandem from 2.57 bil to 5.19 bil. I think the growth in profit is reasonable.<br /><br />Yes you are right that insurance is inherently risky as we cannot predict future claims, but MNRB has grown it's contract liability to 1.6 bil as well. With a cash & quoted securities buffer of >1 bil, I would think the coverage is adequate.<br /><br />If there is any big disaster, then MNRB might need to write more into contract liabilities and hence might suffer losses.Garkhttps://www.blogger.com/profile/01768303613739635625noreply@blogger.comtag:blogger.com,1999:blog-29462482.post-23095641977964966502012-09-04T08:57:47.583+08:002012-09-04T08:57:47.583+08:00Hi Gark,
I do not disagree with Fitch's comme...Hi Gark,<br /><br />I do not disagree with Fitch's comment. The performance of the past 2 quarters are positive and the financial position is stable. My comment that MNRB's bottom-line falls in between small losses & profit of RM50 million for 3 years from early 2008 to late 2011 and as a reinsurer, MNRB could be taking on too much insurance risks to improve its bottom-line.<br /><br />A reinsurer is a clearing house for insurance risk. If you perform that role conservatively & do not take any risk, you would earn only a small fee. To earn more than a clearing fee, you need to take some risk but you put yourself at risk of an insurance claim. It is a difficult choice, especially with the liberalization of the reinsurance sector. Alex Luhttps://www.blogger.com/profile/08920196030603399063noreply@blogger.comtag:blogger.com,1999:blog-29462482.post-20796284222403625062012-09-03T19:09:36.952+08:002012-09-03T19:09:36.952+08:00You wrote that there increasing risk from MNRB'...You wrote that there increasing risk from MNRB's portfolio but fitch rating has raise the outlook from A- to A this year. Can be a sign that MNRB is much more financially stable, and hence poses less risk for the upgrade? <br /><br />So IMHO the higher transfer of profits to P&L is well managed as re-insurance in Malaysia is not that high growth. For the high growth Takaful Ikhlas, most of the profits are being put back into future liability to strengthen the book. <br /><br />Please correct me if I am wrong.Garkhttps://www.blogger.com/profile/01768303613739635625noreply@blogger.com