19 December 2022
1978
1978
Berita
This statement was confirmed by the President Director of Indonesia Re, Benny Waworuntu, in response to the rating results released by Fitch Ratings for Indonesia Re. In its official release, the rating agency has downgraded Indonesia Re's Insurer Financial Strength (IFS) rating to 'B' from 'BB+'.
In addition, Fitch downgraded the company's national IFS rating to 'BBB(idn)' from 'AA-(idn)'. The rating results are determined by Fitch Ratings by providing a number of factors or reasons as the basis of the determination.
One of the factors is Indonesia Re's underwriting results, which have experienced losses in the last three years until September 2022. This condition was triggered by high claims from the credit insurance business.
Indonesia Re had improved the quality of performance by seeking better underwriting results. Indonesia Re's net underwriting results for 31 December 2021 were recorded at minus IDR 445.04 billion, while as of 30 September 2022 it was IDR 10.84 billion.
There was net underwriting growth of IDR 445.88 billion, an increase of 102.44% in that period.
Referring to these results, the strategy to improve the business portfolio has been successfully implemented. We do not agree [with Fitch's assessment] that Indonesia Re has 'Weak Underwriting Performance.
Indonesia Re had reduced its credit insurance portfolio since 2018. This was a part of strategies to improve Indonesia Re's portfolio. Indonesia Re had implemented a long-term reserve calculation for credit insurance, a business line that accounts for around 1.77% of the company's total gross premiums.
Indonesia Re has also adopted triangulation for facultative business and cash loss claims for the treaty business, while for non-cash loss (SOA) claims, the company utilizes simulations of the frequency and delay rate of SOA reports.
Meanwhile, for the life reinsurance business, Indonesia Re had implemented the best practice reserve methodology for premium reserves and IBNR reserves. For long-term products such as Credit Life, Indonesia Re applies the GPV method for premium reserves and the chain ladder for IBNR, and life reinsurers have also used actuarial software since 2018 to calculate GPV for premium reserves."
Capital Injection for Indonesia Re
Responded to Fitch's doubts regarding the realization of the capital injection from the Indonesian government, through the Ministry of State-Owned Enterprises (SOE). According to this rating agency, the government in the last five years has not supported the company's capital.
The Ministry of State-Owned Enterprises had given a green light regarding the support for additional capital injection to Indonesia Re in 2023.
Currently, Indonesia Re waiting for an official letter from the Ministry of SOEs regarding support for additional capital. In the last five years, the Ministry of SOEs has provided support to Insurance companies such as Jamkrindo and Askrindo through state equity participation or PMN.
Furthermore, responded to Fitch's assessment regarding the transparency of the company's financial performance reports. Indonesia Re had issued or published financial reports either on the company's official website or in newspapers.
The publication is made transparently, annually and following the provisions of the Financial Services Authority or OJK. In addition, Indonesia Re regularly publishes an annual report containing a description of the company's performance. As well as quarterly financial reports that publish the company's important balances.
Pefindo Maintains Indonesia Re’s Rating
Meanwhile, according to Pefindo's report (14/12), they said that Indonesia Re's rating remained at“idAA-”with a Mandatory Convertible Bond (MCB) I/2014 rating at“idA+. Pefindo also sets an outlook for the company's financial strength rating to be maintained at "stable".
Therefore, Indonesia Re is considered to be able to maintain the rating from other rating companies with the A- predicate.
For further information, the rating reflects Indonesia Re's important role in supporting the Indonesian Government's mission, strong market position in the reinsurance business, and adequate capital. The rating is limited by its below-average operating performance.
Pefindo stated that the rating would raise if Indonesia Re significantly improves its financial performance, specifically its capital, reserves, and operating performance. It also must be proved by a better underwriting practice, especially for the treaty business.
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About PT Reasuransi Indonesia Utama (Persero) PT Reasuransi Indonesia Utama (Persero), known as Indonesia Re, is a state-owned enterprise that is engaged in reinsurance services with the mission of: (1) Increasing knowledge, capability and application of innovation in insurance/reinsurance; (2) Providing international standard reinsurance solutions to customers; and (3) Increasing the supply and retention of reinsurance in Indonesia. Indonesia Re, which the Ministry of State-Owned Enterprises appointed as a National Reinsurance Company, manages the reinsurance risk of its business partners in the insurance sector by targeting control of the domestic reinsurance market share. The types of reinsurance provided by Indonesia Re include Life Reinsurance Business and General Reinsurance Business. Indonesia Re has two subsidiaries: PT Asuransi Asei Indonesia and PT Reasuransi Syariah Indonesia. Information about Indonesia Re can be found at www.indonesiare.co.id
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[Disclaimer] ”All information regarding data and figures in this release is managed by PT Reasuransi Indonesia Utama (Persero) with good intentions and general information. PT Reasuransi Indonesia Utama (Persero) is not responsible for the completeness and accuracy of the information."
Contact Person:
Aji Irawan
Corporate Secretary
PT Reasuransi Indonesia Utama (Persero)
Jl. Salemba Raya No. 30 Jakarta Pusat 10430
Telp. 021 – 3920101
Email. cosecretary@indonesiare.co.id
Press Release Indonesia Re - Responds to Fitch Rate
JAKARTA - PT Reasuransi Indonesia Utama (Persero) or Indonesia Re said that they had taken strategic steps to improve quality and business performance since in recent years, the insurance industry has faced several challenges.This statement was confirmed by the President Director of Indonesia Re, Benny Waworuntu, in response to the rating results released by Fitch Ratings for Indonesia Re. In its official release, the rating agency has downgraded Indonesia Re's Insurer Financial Strength (IFS) rating to 'B' from 'BB+'.
In addition, Fitch downgraded the company's national IFS rating to 'BBB(idn)' from 'AA-(idn)'. The rating results are determined by Fitch Ratings by providing a number of factors or reasons as the basis of the determination.
One of the factors is Indonesia Re's underwriting results, which have experienced losses in the last three years until September 2022. This condition was triggered by high claims from the credit insurance business.
Indonesia Re had improved the quality of performance by seeking better underwriting results. Indonesia Re's net underwriting results for 31 December 2021 were recorded at minus IDR 445.04 billion, while as of 30 September 2022 it was IDR 10.84 billion.
There was net underwriting growth of IDR 445.88 billion, an increase of 102.44% in that period.
Referring to these results, the strategy to improve the business portfolio has been successfully implemented. We do not agree [with Fitch's assessment] that Indonesia Re has 'Weak Underwriting Performance.
Indonesia Re had reduced its credit insurance portfolio since 2018. This was a part of strategies to improve Indonesia Re's portfolio. Indonesia Re had implemented a long-term reserve calculation for credit insurance, a business line that accounts for around 1.77% of the company's total gross premiums.
Indonesia Re has also adopted triangulation for facultative business and cash loss claims for the treaty business, while for non-cash loss (SOA) claims, the company utilizes simulations of the frequency and delay rate of SOA reports.
Meanwhile, for the life reinsurance business, Indonesia Re had implemented the best practice reserve methodology for premium reserves and IBNR reserves. For long-term products such as Credit Life, Indonesia Re applies the GPV method for premium reserves and the chain ladder for IBNR, and life reinsurers have also used actuarial software since 2018 to calculate GPV for premium reserves."
Capital Injection for Indonesia Re
Responded to Fitch's doubts regarding the realization of the capital injection from the Indonesian government, through the Ministry of State-Owned Enterprises (SOE). According to this rating agency, the government in the last five years has not supported the company's capital.
The Ministry of State-Owned Enterprises had given a green light regarding the support for additional capital injection to Indonesia Re in 2023.
Currently, Indonesia Re waiting for an official letter from the Ministry of SOEs regarding support for additional capital. In the last five years, the Ministry of SOEs has provided support to Insurance companies such as Jamkrindo and Askrindo through state equity participation or PMN.
Furthermore, responded to Fitch's assessment regarding the transparency of the company's financial performance reports. Indonesia Re had issued or published financial reports either on the company's official website or in newspapers.
The publication is made transparently, annually and following the provisions of the Financial Services Authority or OJK. In addition, Indonesia Re regularly publishes an annual report containing a description of the company's performance. As well as quarterly financial reports that publish the company's important balances.
Pefindo Maintains Indonesia Re’s Rating
Meanwhile, according to Pefindo's report (14/12), they said that Indonesia Re's rating remained at“idAA-”with a Mandatory Convertible Bond (MCB) I/2014 rating at“idA+. Pefindo also sets an outlook for the company's financial strength rating to be maintained at "stable".
Therefore, Indonesia Re is considered to be able to maintain the rating from other rating companies with the A- predicate.
For further information, the rating reflects Indonesia Re's important role in supporting the Indonesian Government's mission, strong market position in the reinsurance business, and adequate capital. The rating is limited by its below-average operating performance.
Pefindo stated that the rating would raise if Indonesia Re significantly improves its financial performance, specifically its capital, reserves, and operating performance. It also must be proved by a better underwriting practice, especially for the treaty business.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
About PT Reasuransi Indonesia Utama (Persero) PT Reasuransi Indonesia Utama (Persero), known as Indonesia Re, is a state-owned enterprise that is engaged in reinsurance services with the mission of: (1) Increasing knowledge, capability and application of innovation in insurance/reinsurance; (2) Providing international standard reinsurance solutions to customers; and (3) Increasing the supply and retention of reinsurance in Indonesia. Indonesia Re, which the Ministry of State-Owned Enterprises appointed as a National Reinsurance Company, manages the reinsurance risk of its business partners in the insurance sector by targeting control of the domestic reinsurance market share. The types of reinsurance provided by Indonesia Re include Life Reinsurance Business and General Reinsurance Business. Indonesia Re has two subsidiaries: PT Asuransi Asei Indonesia and PT Reasuransi Syariah Indonesia. Information about Indonesia Re can be found at www.indonesiare.co.id
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
[Disclaimer] ”All information regarding data and figures in this release is managed by PT Reasuransi Indonesia Utama (Persero) with good intentions and general information. PT Reasuransi Indonesia Utama (Persero) is not responsible for the completeness and accuracy of the information."
Contact Person:
Aji Irawan
Corporate Secretary
PT Reasuransi Indonesia Utama (Persero)
Jl. Salemba Raya No. 30 Jakarta Pusat 10430
Telp. 021 – 3920101
Email. cosecretary@indonesiare.co.id
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