Fitch Downgrades 7 Asian Insurers After Sovereigns Criteria Review

(The following statement was released by the rating agency) SINGAPORE/HONG KONG, July 27 (Fitch) 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 www.fitchratings.com">www.fitchratings.com/site/pr/1009379">Fitch Applies Criteria Changes to Global Sovereign Ratings and www.fitchratings.com">www.fitchratings.com/site/pr/1009380 ">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">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 Contact: Primary Analysts Thomas Ng Associate Director (EIB, ETB, EIPL and Malaysian Re) +65 6796 7224 Fitch Ratings Singapore Pte Ltd. 6 Temasek Boulevard #35-05 Suntec Tower Four Singapore 038986 Wan Siew Wai (MTL, Thai Life and Thai Re) Senior Director +65 6796 7217 Secondary Analyst Jeffrey Liew Senior Director +852 2263 9939 Committee Chairperson Stephan Kalb Senior Director +49 69 768076 118 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Disclosure: Muang Thai Life Assurance Public Company Limited (in which KBANK holds a 38.3% economic interest) owns 10% of the shares in Fitch Ratings (Thailand) Ltd. Kasikorn Asset Management Company Limited (in which KBANK holds a 100% stake) owns 10% of the shares in Fitch Ratings (Thailand) Ltd. Thai Life Insurance Public Company Limited has a 10% equity stake in Fitch Ratings (Thailand) Ltd. No shareholder, other than Fitch Ratings Limited, is involved in the day-to-day operations of, or credit rating reviews undertaken by Fitch Ratings (Thailand) Ltd. Additional information is available on www.fitchratings.com">www.fitchratings.com Applicable Criteria Insurance Rating Methodology (pub. 17 May 2016) https://www.fitchratings.com">www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=881564 Additional Disclosures Dodd-Frank Rating Information Disclosure Form https://www.fitchratings.com">www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr _id=1009520 Solicitation Status https://www.fitchratings.com">www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1009520 Endorsement Policy https://www.fitchratings.com">www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&det ail=31 ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.