AM Best Affirms Credit Ratings of PT Asuransi Astra Buana

SINGAPORE--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent), the Long-Term Issuer Credit Rating of “a-” (Excellent) and the Indonesia National Scale Rating (NSR) of aaa.ID (Exceptional) of PT Asuransi Astra Buana (Asuransi Astra) (Indonesia). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Asuransi Astra’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. 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 as of year-end 31 December 2024, as measured by Best’s Capital Adequacy Ratio (BCAR), and is expected to remain at this level over the medium term. The company’s capital adequacy is supported by its consistently robust internal capital generation and low net underwriting leverage. AM Best views Asuransi Astra’s investment portfolio to be of moderate risk, with a majority of investments allocated to bonds and mutual funds, comprising mainly domestically rated bond funds. An offsetting balance sheet strength factor is the company's elevated counterparty credit risk due to its exposure to domestic reinsurance companies not rated on an international FSR scale.

AM Best also views Asuransi Astra’s operating performance as strong, demonstrated by its five-year average combined ratio of 87.9% and return-on-equity ratio of 17.4% (2020-2024). Underwriting performance remained favourable in 2024, with the company reporting a combined ratio of 87.2%, supported by profitable business from its parent group, PT Astra International Tbk (Astra group). Investment returns remain a stable contributor to the company’s overall earnings. Prospectively, AM Best expects Asuransi Astra to continue delivering a strong operating performance, supported by favourable underwriting performance and robust investment income.

AM Best assesses Asuransi Astra’s business profile as neutral. Asuransi Astra is a large insurance organisation in Indonesia, ranking second in the country’s general insurance market based on 2024 gross premiums written. Asuransi Astra benefits from being a subsidiary of the Astra group, having preferential access to business from it, especially in the motor line of business. The company’s portfolio is viewed to be diversified by line of business with key lines being motor, personal accident and health, and fire insurance, although with geographic concentration in Indonesia. Asuransi Astra has moderate distribution channel concentration to a financial leasing company, mainly in respect of its motor insurance business. Notwithstanding, distribution channels are viewed to be broadly diversified for the non-motor insurance business.

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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