2014-03-21 18:31:02 -
A.M. Best has affirmed the financial strength rating (FSR) of B++ (Good) and issuer credit rating of “bbb+” of PT Asuransi Jasa Indonesia (Persero) (Jasindo) (Indonesia). The outlook for both ratings is stable.
The ratings reflect Jasindo’s favorable operating performance in recent years, driven by its consistently profitable underwriting results and stable investment returns. The ratings also acknowledge its adequate capitalization and leading position in the Indonesian market.
Jasindo registered healthy growth in its capital and surplus between the period of 2008 and 2012, due to its favorable operating earnings and underwriting results, which are mainly attributable to the company’s efforts in both risk selection and cost control. Jasindo’s market presence remains solid, with the company ranked as the second-largest non-life insurer
in Indonesia in terms of gross premiums written in 2012. The company continues to demonstrate its competitive advantage in writing corporate core business with its strong ties to large corporations. Meanwhile, Jasindo is also expanding its retail business in medical and health insurance and microinsurance, which helps the company to penetrate further into the market. With the development of the national oil industry, Jasindo’s energy portfolio experienced strong growth in recent years.
Partially offsetting these strengths includes Jasindo’s exposure to potential catastrophe perils and the slowdown of the Indonesian economy.
Jasindo's exposure to natural catastrophes continues to grow, as demonstrated by the flooding in Jakarta in January for the second consecutive year. Managing catastrophe risks remains a key area in the enhancement of the company’s enterprise risk management. Indonesia’s economic growth slowed in 2013, as evidenced by GDP growth below 6%, continued high inflation (which is expected to continue) and the weakened currency against the US dollar. The slowdown of the economic environment is expected to have a negative impact on the Indonesian insurance market in the near term.
Rating upgrades could occur for Jasindo if there is continuation of the favorable operating results, maintenance of strong risk-adjusted capitalization while growing its business and the further enhancement of its catastrophe risk exposure management. Negative rating actions could occur if Jasindo's operating performance deteriorates significantly, resulting in a material decline in its risk-adjusted capitalization level.
The methodology used in determining these interactive ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
This rating announcement has been issued by A.M. Best Asia-Pacific Limited, which is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
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