OREANDA-NEWS. Fitch Ratings has downgraded the Insurer Financial Strength (IFS) ratings of seven insurance companies in Asia by one notch. The Outlook on these ratings is Stable.

The seven Asian insurers are:

- Etiqa Insurance Berhad (EIB)

- Etiqa Takaful Berhad (ETB)

- Etiqa Insurance Pte Ltd (EIPL)

- Malaysian Reinsurance Berhad (Malaysian Re)

- Muang Thai Life Assurance Public Company Limited (MTL)

- Thai Life Insurance Public Company Limited (Thai Life)

- Thai Reinsurance Public Company Limited (Thai Re)

A full list of rating actions is provided at the end of this commentary.

KEY RATING DRIVERS

The rating actions follow Fitch's downgrade of the Long-Term Local-Currency Issuer Default Rating (IDR) of Malaysia to 'A-' from 'A' and that of Thailand to 'BBB+' from 'A-' (see Fitch Applies Criteria Changes to Global Sovereign Ratings and Fitch Reviews Thailand's Ratings, Applies Criteria Changes, dated 22 July 2016). The ratings of these insurers are capped at their respective sovereign's Long-Term Local-Currency IDR.

In Fitch's view, only very strong insurance groups can be rated above the sovereign if they are judged to be sufficiently strong to withstand a sovereign crisis. In certain cases, Fitch would allow insurers that hold high levels of government debt (that is, more than 20% of their invested assets) to be rated above the sovereign rating if they have very good credit quality and sizeable international business diversification.

RATING SENSITIVITIES

With the insurers currently rated at the same level as their sovereigns' Long-Term Local-Currency IDRs, an upgrade of any of the insurers is unlikely in the near future.

Conversely, if the sovereign ratings were lowered, the ratings on the insurers are also likely to be lowered.

See previously released commentary on the various insurance companies at www. fitchratings. com for a discussion of additional ratings sensitivities.

FULL LIST OF RATING ACTIONS

The rating actions on the seven Asian insurers included in this review are as follows:

Etiqa Insurance Berhad

- IFS Rating downgraded to 'A-' from 'A'; Outlook Stable

Etiqa Takaful Berhad

- IFS Rating downgraded to 'A-' from 'A'; Outlook Stable

Etiqa Insurance Pte Ltd

- IFS Rating downgraded to 'A-' from 'A'; Outlook Stable

Malaysian Reinsurance Berhad

- IFS Rating downgraded to 'A-' from 'A'; Outlook Stable

Muang Thai Life Assurance Public Company Limited

- IFS Rating downgraded to 'BBB+' from 'A-'; Outlook Stable

Thai Life Insurance Public Company Limited

- IFS Rating downgraded to 'BBB+' from 'A-'; Outlook Stable

Thai Reinsurance Public Company Limited

- IFS Rating downgraded to 'BBB+' from 'A-'; Outlook Stable