Energas Insurance shows strong performance with 5-year combined ratio

The company's investment portfolio is considered conservative by AM Best.

Despite recent increases in its stop loss reinsurance program's aggregate retention level leading to increased volatility in underwriting performance, Energas Insurance is expected to maintain a turnaround over the near to medium term, with investment income playing a key role in its bottom-line performance, AM Best said. 

Energas Insurance demonstrated strong operating performance, evidenced by its five-year average combined ratio of 68.4%. 

Energas is perceived to have a very strong balance sheet strength, supported by its conservative investment portfolio and low underwriting leverage. 

Energas maintains a strong capital position, with its risk-adjusted capitalisation expected to remain at the strongest level over the medium term. 

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The company's investment portfolio is considered conservative, primarily consisting of cash, deposits, and high-quality government and corporate bonds. 

Whilst Energas relies on reinsurance to manage its exposure to accumulation and large single risks, its use of a good credit quality reinsurance panel partially mitigates credit risk.

In terms of business profile, Energas benefits from its relationship as a single-parent captive to PETRONAS, Malaysia's national oil and gas company. 

However, the company's underwriting portfolio exhibits concentration by line of business and geography, particularly in upstream and downstream energy risks located in Malaysia, rendering its business profile neutral.