RAM Ratings downgrades MCIS Life's insurer financial strength ratings to A2; revises outlook to stable

RAM Ratings has downgraded MCIS Insurance Berhad's (MCIS Life or the Insurer) insurer financial strength (IFS) ratings to A2/P1 from A1/P1. The downgrade reflects a material weakening in MCIS Life's profitability in FY Dec 2024 and 1H FY Dec 2025, with underwriting and pre-tax losses in both periods. At the same time, business mix remains heavily skewed towards yearly renewable group products and single-premium savings plan. These issues, which underpinned the negative outlook in early 2025, continued to weigh on the Insurer's performance throughout last year. Consequently, the deterioration in its credit profile no longer supports the previous A1 long-term IFS rating. 

MCIS Life's underwriting performance deteriorated further, recording continued underwriting losses of RM10.0 mil in 1H FY Dec 2025 (FY Dec 2024: RM11.3 mil loss; FY Dec 2023: RM40 mil profit). The weakness was primarily due to higher expenses arising from regulatory overrun cost treatment and elevated medical claims. Pre-tax losses widened further to RM10.6 mil in 1H FY Dec 2025, compared with a modest RM0.5 mil loss in FY Dec 2024, which included a one-off RM11.9 mil impairment. 

Single-premium savings policies and yearly renewable employee benefits (EB) plans accounted for over 80% of total new business in 1H FY Dec 2025 - well above the industry average and a key source of NB volatility. Management has initiated a turnaround plan focused on the mid-income segment, premium repricing and phasing out legacy loss-making offerings in favour of higher-margin products. However, successful execution of these initiatives - without eroding competitiveness or customer retention - remains uncertain. 

The revision of the rating outlook to stable from negative reflects our view that MCIS Life's conservative investment strategy and still-sound capitalisation provide sufficient buffers at the current