[RAM] RAM Ratings assigns AA1 first-time IFS rating to Hong Leong MSIG Takaful

RAM Ratings has assigned insurer financial strength (IFS) ratings of AA₁/Stable/P1 to Hong Leong MSIG Takaful Berhad (HLMT). Its proposed RM200 mil Tier-2 Subordinated Sukuk Wakalah Programme (2026/-) has been assigned an AA₂/Stable rating. The one-notch difference reflects the programme’s subordinated and unsecured status.

The IFS rating s are underpinned by a high likelihood of support from Hong Leong Financial Group Berhad, a non-operating financial holding company whose credit strength is anchored by Hong Leong Bank Berhad (HLBB, rated AAA/Stable/P1), a major subsidiary. As HLFG’s family takaful arm, HLMT is considered strategically important and benefits from close operational integration with the group.

HLMT’s standalone profile is supported by healthy capital buffers, conservative investment risk appetite and sound liquidity, but constrained by its small market presence, modest profitability and reliance on single-contribution products. Its capital adequacy is well above the individual target capital level and regulatory minimum of 130%. Preliminary plans to raise RM40 mil via subordinated sukuk issuance would increase pro forma leverage to 8.1%, which is still viewed as low.

Business generation is concentrated, with more than half of new business coming from credit takaful via a bancatakaful partnership with HLBB. While higher medical claims and limited repricing flexibility have weighed on earnings, steady investment income provides some support. A focus on growing investment-linked and protection products beyond bank channels is expected to increase the share of regular contributions and earnings diversification over time.


Analytical contacts
Sean Lim, CFA 
(603) 2708 8253
sean@ram.com.my

Lee Yee Von 
(603) 2708 8217
yeevon@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my