Decline in credit insurance business affects Asuransi Asei Indonesia

The decline in the credit insurance segment in 2023 affected the insurer’s gross premiums written.

Asuransi Asei Indonesia's company profile is deemed 'less favourable', driven by its operating scale and risk appetite. The exposure to reinsurance recoverables surged to 161% by end-2023, raising risks due to the weak credit quality of some domestic reinsurers, according to Fitch Ratings.

Asei maintains a conservative investment strategy, with a low exposure to risky assets. Overall, Asei demonstrates satisfactory financial strength, despite some challenges in its business profile and reinsurance exposure.

The rating agency also perceives Asuransi to have a stable outlook. 

ALSO READ: Manulife Investment, Indonesia partner for infra development

Asei's regulatory risk-based capital (RBC) ratio stood at 306% by end-2023, comfortably above the minimum requirement.

However, its absolute capital is lower than some rated peers, with high financial leverage due to a subordinated loan.

Asei witnessed a decline in its credit insurance business in 2023, impacting its gross premiums written. The company aims to limit credit insurance exposure to half of its business portfolio. Asei's profitability has been healthy, with a combined ratio of 92% in 2023.