Suara.com – PT AsuransiAstra Buana (Asuransi Astra) obtained a Financial Strength Rating A- (Excellent) and a Long-Term Issuer Credit Rating “a-“ (Excellent) with a stable outlook from AM Best, a global credit rating agency specializing in the insurance industry headquartered in United States of America. Since 1899, AM Best has done business in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. Until now, including Asuransi Astra, there are only 2 (two) National General Insurance companies in Indonesia that have received an A-“Excellent” rating, which is the highest rating in Indonesia.
The rating reflects 4 assessment factors, including the strength of Asuransi Astra’s balance sheet which is considered AM Best very strong, operational performance which is considered strong, business profile which is considered neutral, and Enterprise Risk Management (ERM) which is considered appropriate. The rating has also taken into account the neutral factor of Jardine Matheson Holdings Limited (Bermuda) as the ultimate parent of Asuransi Astra.
Asuransi Astra’s balance sheet capability is supported by risk-adjusted capitalization which was at the strongest level on December 31, 2021, and is expected to continue to be maintained at the strongest level based on the Best’s Capital Adequacy Ratio (BCAR). Asuransi Astra’s capital adequacy is supported by internal capital gains and low net underwriting leverage. On the other hand, regarding the investment portfolio, AM Best considers that Asuransi Astra’s investment portfolio has moderate risk, mainly consisting of bonds that are directly owned and placed in mutual funds. More than half of the mutual funds owned by Asuransi Astra are bonds with domestic ratings. In compliance with applicable regulations, Asuransi Astra has exposure to domestic reinsurance that does not yet have an international rating, so Asuransi Astra’s credit risk is considered higher.
Asuransi Astra’s operational performance is also considered strong. This is shown by the five-year average combined ratio of 88.5% and return on equity (ROE) of 18.0% (2018-2022). This strong performance can be maintained throughout 2022, because the negative impact of normalizing claims on the company’s claims ratio can be offset by improvements in the ratio of investment costs and income. Asuransi Astra’s net profit in 2022 is IDR 1.2 trillion, higher than in 2021 which was IDR 1.1 trillion.
Astra Insurance’s business profile is considered neutral by AM Best. Asuransi Astra’s portfolio is diversified into several business lines, with the main lines being motor vehicle, personal accident and health, and fire insurance. Asuransi Astra has a moderate concentration of distribution channels in leasing companies, especially in motor vehicle insurance.
As for the implementation of risk management, Astra Insurance’s Enterprise Risk Management (ERM) is considered appropriate by AM Best taking into account the size and complexity of Astra Insurance’s current operations. Asuransi Astra’s excess of loss reinsurance program provides adequate protection for earthquake risks. On the other hand Astra Insurance also conducts periodic stress tests to evaluate and anticipate the impact of various scenarios on capital adequacy based on applicable regulations.
“Our credibility and reputation are getting stronger with this A- (Excellent) rating from AM Best and we believe this can make customers more confident in protecting their assets with us. It is this trust that has been our motivation to continue to maintain the performance and reputation that we have built and to continue to innovate, adapt and adjust so that we are always able to provide the best products and services for all customers and stakeholders,” said Astra Insurance’s President Director. , Rudy Chen.
