The revised outlook is due to expectations of stable interest rates, said Maybank IB in a note today.

Thus, it expects MNRB’s investments for the current financial year to be positive, with favourable contributions from Labuan Re, the group’s 20%-owned affiliate.

Maybank IB has also increased MNRB’s earnings forecast by 6% to 11% for the financial years 2024 to 2026 due to expected growth in its investment income.

Additionally, the investment bank feels optimistic about MNRB’s earnings for the year due to proactive measures taken by its subsidiary Malaysian Reinsurance Bhd following the floods in December 2021.

These measures included raising prices and deductibles for flood insurance, shifting from overriding commissions to profit commissions, reducing the lines of insurance to be ceded, and implementing quota share arrangements.

It added that MNRB’s transition from less profitable reinsurance activities to a more stable segment, such as managing general agent operations, is expected to improve its claim experience.

“Several risk factors such as thin underwriting margins of the reinsurance businesses, risk of potential capital calls, risk of full liberalisation of the reinsurance industry, potential mark-to-market losses amid rising interest rates, and further consolidation within the insurance industry, amongst other factors could intensify competition,” Maybank IB said.

As at 11.19am, MNRB’s share price was unchanged at RM1.19, giving it a market capitalisation of RM931.87 million.