How Can You Benefit from Ratings?
by RAM Rating Services Berhad
Confidence and credibility are essential for business success. Ratings by a credible provider play a crucial role in supporting these aspirations by offering an impartial evaluation of a firm’s financial health, management capabilities and overall performance.
- Build trust. Getting an independent assessment by a credible third party signals a firm’s transparency and willingness to communicate its standing with stakeholders.
- Competitive advantage. Ratings are a simple and effective overview of business position and financial standing. Stakeholders appreciate clarity in business practices and even businesses with moderate ratings can showcase their transparency and financial responsibility.
- Business and financial terms. Among counterparties, ratings provide a benchmark for discussions that align with circumstances. Firms with favourable ratings could benefit from cheaper funding, access to capital and business growth.
- Risk management. A rating exercise fosters risk awareness within the organisation and provides perspective on strengths or weaknesses. This facilitates better decision making and planning.
LABUAN ENTITY CORPORATE ASSESSMENT (LECA®)
LECA is a rating service for entities in Labuan IBFC, evaluated by RAM Rating Services Berhad – an established and licensed credit rating agency in Malaysia.
For the insurance and bank sectors, LECA is an assessment of claims paying ability and financial strength. For service providers like trust companies, insurance managers and brokers, LECA evaluates capacity and competence in fulfilling roles and responsibilities. LECA ratings apply well established risk methodologies and are expressed using familiar rating scales.
For the insurance and bank sectors, LECA is an assessment of claims paying ability and financial strength. For service providers like trust companies, insurance managers and brokers, LECA evaluates capacity and competence in fulfilling roles and responsibilities. LECA ratings apply well established risk methodologies and are expressed using familiar rating scales.
How does RAM derive the LECA rating?
RAM applies established frameworks for credit and performance evaluation, that are common to credit and performance assessments. Governance, risk management and regulatory compliance are standard components of all LECA evaluations.
For banks and firms in the insurance segment, we assess the operating environment, business position and risk profile, as well as financial indicators measuring performance, capital strength/solvency, operating leverage and liquidity. For service providers, we consider experience, track record, staff strength, business support systems and financial performance.
The rating process
A LECA rating is a straightforward experience. After a rating agreement is formalised, information is submitted to RAM. Some interaction with representatives of the rated firm is expected during the review of information by RAM analysts. A meeting with key management is a precursor to the rating assessment process.
The rating assessment combines analytical insight from information and discussions, leading to rating committee endorsement. Typically, the rating and report will be delivered 4 weeks after information submission.
The rating assessment combines analytical insight from information and discussions, leading to rating committee endorsement. Typically, the rating and report will be delivered 4 weeks after information submission.
Get Rated with LECA®
LECA is for Labuan IBFC entities of all size and stature – with the same standards of analytical diligence and service quality from RAM. For more information, please contact:
About RAM
Established in 1990, RAM Ratings is a leading credit rating agency registered under the Securities Commission Malaysia’s Guidelines on Credit Rating Agencies. In addition to the provision of independent credit ratings for companies, bonds and sukuk, RAM Ratings also provides research and publications on macro-economic and industry analysis, Islamic finance, and data analytics relating to credit risk, counterparty assessments and other related domains.
RAM is an acronym for Rating Agency Malaysia. The RAM Group also offers sustainability and ESG analytics, and bond information services. For more on RAM or LECA, visit www.ram.com.my and https://analytics.ram.com.my/LECARating.
Established in 1990, RAM Ratings is a leading credit rating agency registered under the Securities Commission Malaysia’s Guidelines on Credit Rating Agencies. In addition to the provision of independent credit ratings for companies, bonds and sukuk, RAM Ratings also provides research and publications on macro-economic and industry analysis, Islamic finance, and data analytics relating to credit risk, counterparty assessments and other related domains.
RAM is an acronym for Rating Agency Malaysia. The RAM Group also offers sustainability and ESG analytics, and bond information services. For more on RAM or LECA, visit www.ram.com.my and https://analytics.ram.com.my/LECARating.
