RAM Ratings has assigned an “a” LECA rating to Polisea Labuan Ltd (Polisea Labuan or the Insurer), a licensed general re(insurer) in Labuan IBFC. The rating indicates adequate capacity to meet policyholder obligations and financial commitments.
Polisea Labuan is a wholly-owned subsidiary of Polisea Pte. Ltd., an insurtech group that operates under the PolicyStreet brand. The establishment of Polisea Labuan in 2021 provides underwriting and product design flexibility, and allows the Group to retain a share of risks generated through its own channels to capture a greater share of the value chain.
The ratings agency said Polisea Labuan benefits from the Group’s business verticals which include brokerage, advisory, insurtech infrastructure, underwriting and operations support. It presently underwrites extended warranty, mobile damage protection coverage, personal accident policies and satisfaction guarantee programmes via partnerships with leading e-commerce, gig economy and travel platforms. Its priority is to provide coverage for niche low severity, high frequency risks that are short-tailed. Polisea Labuan turned profitable in FY23 and is well positioned for growth opportunities.
Claims experience for insurtech-enabled coverage has been favourable, at 14.7% in 9M FY24. While these remain its focus, Polisea Labuan has also selectively provided capacity for facultative property and employee benefit coverage. While it retains a small share of risks underwritten, higher sums assured and the absence of stop-loss arrangements could lead to loss exposures that may weaken the Insurer’s capital adequacy and liquidity.
Its strong liquidity and capital adequacy ratio of 1789% as at end-September 2024 provides some buffer for fluctuations in underwriting performance and capacity for expansion. Excess funds are retained in liquefiable investments.
LECA is an assessment service from RAM Rating Services Berhad for companies based in Labuan IBFC. LECA ratings are typically valid for up to 1 year after they are assigned. TAM said the rating could be updated or changed upon the availability of material information, or in the event of material developments or changes in circumstances.
