AM Best Affirms Credit Ratings of PT KB Insurance Indonesia

HONG KONG--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of B++ (Good), the Long-Term Issuer Credit Rating of “bbb+” (Good), and the Indonesia National Scale Rating of aaa.ID (Exceptional) of PT KB Insurance Indonesia (KB Indonesia) (Indonesia). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect KB Indonesia’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings also recognise the wide range of support provided by KB Indonesia’s parent, KB Insurance Co., Ltd. (KBI), which is fully owned by KB Financial Group Inc. (KB Group).

KB Indonesia’s risk-adjusted capitalisation is at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by its strengthening of capital base through full profit retention. An offsetting factor in the balance sheet strength assessment includes considerable counterparty credit risk exposure to domestic (re)insurers with relatively weaker credit quality.

AM Best assesses KB Indonesia’s operating performance as adequate, with a return-on-equity ratio of 7.6% and a combined ratio of 102.5% (net/net) in 2025 under the new accounting standards (IFRS 17/9), as calculated by AM Best. The company’s underwriting profit is supported mainly by business from Korea Interests Abroad (KIA) and KB Group affiliates (KB Synergy), while other local business adds moderate volatility. Despite deterioration in 2025, AM Best expects KB Indonesia’s underwriting performance to benefit from its efforts to expand KIA and KB Synergy business and other mitigative underwriting measures. The company’s conservative investment portfolio provides stable investment profits that provide a buffer against its volatility in the underwriting side.

As a joint venture between KBI (70%) and PT AB Sinar Mas Multifinance (30%), KB Indonesia is a small-sized non-life insurer domiciled in Indonesia. The company’s business sourcing channels have become increasingly diversified, following the entries of KB Group affiliates in Indonesia as part of the group’s overseas expansion. However, diversification into local business remains limited. KB Indonesia’s business profile exhibits concentration by line of business and geography.

KB Indonesia receives rating enhancement from implicit and explicit support from its parent, KBI, as it plays an important role in KB Group’s overall expansion strategy in Indonesia’s insurance market and benefits from the group’s network and distribution channels there. AM Best expects that the parent will provide capital support to KB Indonesia if needed, as evidenced by KBI’s public announcement to support the company fully in fulfilling the strengthened domestic capital requirements that will be applied over the coming years. AM Best expects that KB Indonesia’s planned change in organisational structure with a new intermediate holding company will lead to a more efficient decision-making process and stronger synergy among affiliates in Indonesia, while the support from the group and KBI remains unchanged.

Negative rating actions could arise if KB Indonesia’s risk-adjusted capitalisation significantly deteriorates, such as from heightened credit risk following major loss events or from excessive business expansion that materially outpaces capital growth. Negative rating actions also could occur for KB Indonesia if support from KBI and the group is reduced to an extent that no longer supports the current level of rating enhancement. Positive rating actions could arise if KB Indonesia’s operating performance improves and reaches a level that positively distinguishes the company from its industry peers in a sustainable manner.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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