AM Best Affirms Credit Ratings of PT Lippo General Insurance Tbk.

HONG KONG--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating 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 Lippo General Insurance Tbk. (LGI) (Indonesia). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect LGI’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also reflect the support that the company receives from its ultimate parent, Hanwha Life Insurance Co., Ltd. (Hanwha Life), and its immediate parent, Hanwha General Insurance Company Limited (HGI).

LGI’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), is assessed at very strong level. The company maintains relatively high underwriting leverage due to its focus on health insurance and its recent growth in short-term credit insurance. Furthermore, the company is exposed to sizeable credit risk arising from large cessions to domestic (re)insurers with weaker credit quality, in compliance with domestic regulations. Nevertheless, potential material elevation of credit risk in the event of high-severity losses is partly mitigated by a moderate allocation to global reinsurers with strong credit quality in its excess of loss programme. The company’s investment strategy remains conservative with sufficient liquidity.

LGI’s operating performance is assessed at the adequate level, with a return on equity of 15.0% and a combined ratio (net/net) of 97.6% in 2025 under IFRS17, as calculated by AM Best. The company’s underwriting performance has showed a moderate level of volatility in recent years, mainly driven by medical inflation in health insurance and pressure in the property line, although this is being partially mitigated by active rate adjustments and a portfolio restructuring, as observed from improved performance in 2025. The company has a stop-loss mechanism embedded in its fast-growing credit insurance business, which allows a very stable, yet thin, underwriting margin. LGI’s investment profits have been growing steadily and partially offset underwriting volatility.

LGI is a medium-size non-life insurer in Indonesia with a strong market presence in the group health insurance segment and has diversified underwriting portfolio and channels. The company’s premium growth has outperformed the domestic industry in recent years, driven by its entry into credit insurance, coupled with the impact of rate increases in health insurance. It also achieved notable growth in Korea Interests Abroad business, leveraging its parent company’s Korean origin and established relationships with Korean corporations.

LGI is strategically important to Hanwha Life as part of the group’s global strategy to establish a comprehensive financial hub in Indonesia. In addition to various kinds of implicit support it receives from Hanwha Life and HGI, AM Best expects the parent to provide capital support to LGI in times of need. LGI’s integration into Hanwha Life is well underway, including the planned change of its brand name to Hanwha within the next few years.

Negative rating actions could arise if LGI’s risk-adjusted capitalisation significantly deteriorates, such as from heightened credit risk following major loss events or from excessive business expansion that materially outpaces its capital growth. Negative rating actions could occur if the company’s strategic importance to and support from Hanwha Life and HGI are reduced to an extent that it no longer supports the current level of rating enhancement. Positive rating actions could arise if there is a sustained improvement in LGI’s operating performance that positively distinguishes it from industry peers.

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.

Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.