Asuransi Tokio Marine Indonesia’s Credit Ratings Affirmed By AM Best

KUALA LUMPUR, May 16 (Bernama) -- Global credit rating agency, 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).

In a statement, AM Best said the outlook for both credit ratings (ratings) remains stable, which reflected TMI’s balance sheet strength, assessed as strong, and was supported by robust 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).

As of the end of 2024, TMI’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, was at the strongest level and is expected to maintain this strength over the medium term. Despite a decline in capital adequacy in 2023 due to large reinsurance claims, the company rebounded in 2024, aided by prompt claim settlements.

Over the past five years (2020-2024), TMI has demonstrated a track record of strong internal capital generation, with average annual shareholders’ equity growth of 9.4 per cent. Additionally, TMI has a conservative investment portfolio composed mainly of government bonds, cash and deposits.

AM Best assesses TMI’s operating performance as strong, evidenced by a five-year average combined ratio of 84 per cent and return-on-equity ratio of 18 per cent. The company’s underwriting performance remained robust in 2024 with a combined ratio of 82 per cent, supported by favourable loss experience in its marine cargo, motor and fire class of business.

bootstrap slideshow

Moreover, TMI’s investment returns from interest income is also a stable contributor to overall earnings. TMI’s business profile is considered limited due to its smaller market presence, holding approximately two per cent of Indonesia’s non-life insurance market based on 2024 gross premiums written.

Nevertheless, the company maintains moderate line-of-business diversification and has benefitted from its affiliation with TMH through access to Japanese interest abroad (JIA) risks in Indonesia. TMI has also shown significant growth in non-JIA-related risks over time, particularly for marine cargo.

-- BERNAMA