KUALA LUMPUR, May 20 -- AM Best has placed under review with negative implications the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of ‘bbb’ (Good) of PT Asuransi Jasa Indonesia (Asuransi Jasindo) Indonesia.
This Credit Rating (rating) action follows significant deterioration in Asuransi Jasindo’s underwriting performance emanating from the company’s credit insurance business.
Whilst the company’s 2020 audited financial statements have yet to be finalised, summarised regulatory filings for 2020 and for the first quarter of 2021 indicate marked deterioration in operating performance, as well as reserve strengthening and capital erosion, which led to a significant fall in the company’s local regulatory solvency ratio.
As of March 31, the company’s solvency ratio was only marginally above the minimum regulatory requirement, according to a statement from the global credit rating agency.
The ratings have been placed under review with negative implications to reflect uncertainty surrounding the latest financial position of the company, pending finalisation of the audited 2020 financial statements.
The under-review status also reflects the need for AM Best to consider timeliness and effectiveness of planned remedial actions further, as well as their impact on prospective balance sheet strength and operating performance fundamentals.
AM Best will also need to evaluate any action taken to address recently observed governance and control deficiencies in respect of underwriting risk and capital management.
The ratings will remain under review until AM Best can assess the impact of recent developments on the company’s credit rating fundamentals, including balance sheet strength, operating performance and enterprise risk management.
More details at www.ambest.com.
-- BERNAMA
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