[RAM] RAM Ratings affirms Manulife Holdings' AA2/Stable/P1 ratings

RAM Ratings has affirmed Manulife Holdings Berhad’s (MHB or the Group) AA₂/Stable/P1 corporate credit ratings, reflecting the Group’s established insurance and asset management franchise in Malaysia, sound capitalisation at its core insurance subsidiary, and the expected extraordinary support from its ultimate parent, Manulife Financial Corporation (MFC), if required.

The ratings benefit from an uplift, reflecting MHB’s role as MFC’s operating platform in Malaysia and the parent’s Asia-focused growth strategy, notwithstanding its 63.3% ownership stake and MHB’s relatively modest contribution to the wider group. As part of the broader MFC group, it is able to leverage on the global branding and market positioning of MFC, and the healthy capital position of Manulife Insurance Berhad (MIB), its core operating subsidiary and principal earnings contributor, as well as earnings diversification from its asset management business. As MHB has no holding company debt, no notching adjustment is applied for structural subordination.

MIB remains the main driver of the Group’s credit profile. MIB’s new business (NB) eased 6.0% y-o-y in FY Dec 2025, largely due to softer bancassurance credit product sales after exceptionally strong volumes in the previous year. NB rebounded 7.2% y-o-y in 1Q 2026, driven by stronger agency contributions. However, full-year growth may remain moderate as bancassurance volumes normalise and the business mix shifts towards protection-oriented investment-linked products, which generally have smaller case sizes. This shift also increased capital strain and pressured MIB’s capital adequacy ratio, although MIB’s capital buffer remains comfortably above both its internal target and the regulatory minimum.

MHB’s profitability remains constrained by its modest domestic scale, with both MIB and Manulife Investment Management (M) Berhad holding less than 3% of their respective market segments. The Group’s pre-tax return on assets ranged between 0.8% and 2.5% from FY Dec 2022 to 1Q FY Dec 2026, with stronger periods supported by investment gains. In fiscal 2025, MHB recognised a one-off reduction in its contractual service margin (CSM) following revised medical claims assumptions and repricing limitations - resulting in a 10.9% decline in CSM during the year. This underscores the sensitivity of life insurers’ earnings to medical claims inflation and repricing lags, which may continue to pressure earnings over the medium term if claims trends remain elevated.


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