S&P give Malaysia outlook

LONDON - Insurance companies in Malaysia are under pressure to capture more market share and retain more risk to maintain premium volumes, according to Standard and Poor's (S&P). The rating agency said an economy in recession, cheap reinsurance, vigorous competition, and ongoing erosion of premium rates are making trading conditions difficult. S&P also expects further deterioration in underwriting performance in 1999 and expects the industry loss ratio to rise a few percentage points to between 62% and 65%. Meanwhile, increased investment earnings associated with the higher interest rate environment are expected to partly moderate the effect of the deteriorating underwriting performance on bottom-line profitability.