KUALA LUMPUR, March 17 (Bernama) -- Global credit rating agency AM Best has assigned a Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) to Indonesia’s PT Asuransi Astra Buana (Asuransi Astra).
The outlook assigned to these Credit Ratings (ratings) is stable reflecting Asuransi Astra’s balance sheet strength, which AM Best assessed as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
According to AM Best in a statement, the ratings also factor in a neutral impact from Asuransi Astra’s ultimate parent, Jardine Matheson Holdings Limited (Bermuda).
Asuransi Astra’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which was at the strongest level at Dec 31, 2021 and is expected to maintain at the strongest level, as measured by Best’s Capital Adequacy Ratio.
The company’s capital adequacy is supported by its internal capital generation and low net underwriting leverage.
AM Best viewed Asuransi Astra’s investment portfolio to have moderate risk, comprising mainly bonds held directly and through mutual funds. More than half of its mutual funds consisted locally rated bond funds.
In addition, Asuransi Astra’s operating performance viewed by AM Best as strong, demonstrated by its five-year average combined ratio of 88.5 per cent and return-on-equity ratio of 18.0 per cent (2018-2022).
Profitable business from its parent group, PT Astra International Tbk (Astra group), is the key contributor to Asuransi Astra’s strong operating performance. This performance remained robust during 2022, as the negative impact of claims normalisation on the company’s loss ratio was offset by an improved expense ratio and stronger investment income.
Asuransi Astra is a large insurance organisation in Indonesia, ranking third by market share in 2021 in the country’s general insurance market. Its portfolio is diversified by line of business with key lines being motor, personal accident and health, and fire insurance.
-- BERNAMA
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