[RAM] RAM Ratings affirmed Hong Leong Assurance's AAA rating

RAM Ratings has affirmed Hong Leong Assurance Berhad’s (HLA or the Insurer) AAA/Stable/P1 insurer financial strength (IFS) ratings and the AA₁/Stable rating of its RM2 billion Subordinated Notes Programme (2020/-). The one-notch difference between HLA’s long-term IFS rating and the rating of the programme reflects the unsecured and subordinated nature of the notes.

The affirmation reflects RAM’s assessment of a “high” likelihood of extraordinary support from Hong Leong Financial Group Berhad (HLFG or the Group), a non-operating financial holding company whose credit profile is anchored by its major subsidiary, Hong Leong Bank Berhad (HLB or the Bank, rated AAA/Stable/P1). As a core component of HLFG’s insurance operations, HLA is viewed to be strategically important to the Group’s domestic franchise. In FY Jun 2025, the Insurer contributed 8% of HLFG’s pre-tax profit.

HLA held an 8.7% share of the industry’s annual premium equivalent in 1H 2025, ranking fifth among 14 players. The Insurer’s strategic focus on regular and protection-based premiums underpins sustainable income generation. Strong bancassurance sales drove new business premiums up by 12% in FY Jun 2025, with momentum expected to continue. Financial market performance remains a key driver of profitability. Despite a 7% rise in insurance revenue, profitability was moderated by lower investment returns in FY Jun 2025 following an above-average performance in the prior year, resulting in a 26% decline in pre-tax profit to RM484 mil. 

As at end-June 2025, HLA’s capital adequacy ratio (CAR) remained adequate to support business growth and absorb market volatility. The Insurer’s liquid assets to net insurance contract liabilities ratio was 0.8 times, providing a healthy buffer against claims liabilities.


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