A.M. Best Co. has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of "bbb" of Malayan Insurance Company, Inc. (MICO) (Philippines).

The outlook for both rating is stable.

The ratings reflect Malayan's strengthened risk-adjusted capitalization,

strong market presence with diversified distribution network and stable investment income. Malayan Insurance is well capitalized as reflected in its moderate underwriting leverage and strong riskadjusted capitalization as measured by Best's Capital Adequacy Ratio (BCAR). The company reduced its net premium leverage ratio to 0.57 times (0.61 times in 2005), while maintaining a stable growth in surplus level in 2006.

Malayan Insurance has established itself as the market leader in the Philippines' non-life market. The company maintained its leadership position, capturing 18 percent of the local market in 2006. Through its nationwide branch network, agency and broker channels, MICO continued to experience a growth of 12.5 percent in total GPW for 2006. A.M. Best believes its diversified distribution network has given it a competitive advantage over its peers.

A.M. Best believes that stable underwriting income and continued strong risk-adjusted capitalization are essential to the business growth of Malayan, going forward. Malayan Insurance is a flagship company of the Yuchengco Group, which has interests in the banking, finance, investments, construction and real estate, life insurance, education and the automobile industry.

The Philippine non-life insurance industry is somewhat facing a weak regulatory environment with low levels of capitalization requirements, compliance with certain tariff agreements and political instability. In addition, as with other non-life insurers in the country, MICO is exposed to catastrophic perils like typhoons, floods and volcanic eruption.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.