SINGAPORE--(BUSINESS WIRE)--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 a 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 a marked deterioration in operating performance, as well as reserve strengthening and capital erosion, which has led to a significant fall in the company’s local regulatory solvency ratio. As of 31 March 2021, the company’s solvency ratio was only marginally above the minimum regulatory requirement.
Asuransi Jasindo’s management team, in conjunction with finalising the latest audited financial statements, is implementing remedial actions aimed at stemming the losses from the credit insurance business, as well as considering capital management actions in light of the recent regulatory solvency deterioration.
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 the 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 actions 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.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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