AM Best Affirms Credit Ratings of PT Asuransi Tokio Marine Indonesia
16 Mayo 2024 - 9:14AM
Business Wire
AM Best has affirmed the Financial Strength Rating of A-
(Excellent) and the Long-Term Issuer Credit Rating of “a-”
(Excellent) of PT Asuransi Tokio Marine Indonesia (TMI)
(Indonesia). The outlook of these Credit Ratings (ratings) is
stable.
The ratings reflect TMI’s balance sheet strength, which AM Best
assesses as strong, as well as its strong operating performance,
limited business profile and appropriate enterprise risk
management. In addition, the ratings factor in rating enhancement
from Tokio Marine & Nichido Fire Insurance Co., Ltd., which is
the main insurance operating entity of Tokio Marine Holdings, Inc.
(TMH).
TMI’s risk-adjusted capitalisation, as measured by Best’s
Capital Adequacy Ratio (BCAR), has deteriorated to the very strong
level as at year-end 2023. The company’s exposure to reinsurance
credit risk has risen significantly in 2023 given recent large
claims that were ceded to domestic (re)insurance counterparties of
lower credit quality. Notwithstanding this, capital adequacy is
projected to recover following reinsurance settlements over the
near to medium term. The company has demonstrated strong internal
capital generation, with average annual shareholders’ equity growth
of 11.5% over the past five years (2019-2023). In addition, TMI has
a conservative investment portfolio composed of mainly government
bonds, cash and deposits.
AM Best assesses TMI’s operating performance as strong,
evidenced by a five-year average combined ratio of 85% and
return-on-equity ratio of 18% (2019-2023). The company’s
underwriting performance remained robust in 2023 with a combined
ratio of 84%. The loss ratio improved marginally in 2023 supported
by more favourable loss experience on its marine cargo and
engineering lines, although partially offset by higher losses in
fire insurance. In addition, TMI’s investment returns from interest
income remain a stable contributor to overall earnings.
AM Best views TMI’s business profile as limited. TMI is a
small-sized, non-life insurer in Indonesia, with a domestic market
share of 2.1%, as measured by 2023 gross premium written. AM Best
views the company’s portfolio to be diversified moderately by line
of business with key lines including fire, marine and motor
insurance, although with a geographic concentration in Indonesia.
TMI benefits from preferential access to Japanese interest abroad
(JIA) related risks in Indonesia given its affiliation and common
branding with TMH. The company also has shown significant growth in
non-JIA-related risks over time, particularly for marine cargo.
Ratings are communicated to rated entities prior to
publication. Unless stated otherwise, the ratings were not amended
subsequent to that communication.
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best’s
Credit Ratings. For information on the proper use of Best’s Credit
Ratings, Best’s Performance Assessments, Best’s Preliminary Credit
Assessments and AM Best press releases, please view Guide to Proper
Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specialising in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London,
Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more
information, visit www.ambest.com.
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Susan Tan Financial Analyst +65 6303 5023
susan.tan@ambest.com Chris Lim, FCII, CFA Associate Director,
Analytics +65 6303 5018 chris.lim@ambest.com
Christopher Sharkey Associate Director, Public Relations +1 908
882 2310 christopher.sharkey@ambest.com Al Slavin Senior
Public Relations Specialist +1 908 882 2318
al.slavin@ambest.com