The ratings reflect TPI’s good business profile in the profitable commercial segment of Indonesia’s non-life insurance industry, its strong operating performance and favorable risk-adjusted capitalization.
TPI is 65% owned by PT
The company’s balance sheet strength is also favorable and supportive of its ratings. Net underwriting risk is reduced substantially through reinsurance. TPI’s gross underwriting leverage and reinsurance asset leverage measures are moderate compared with its commercial lines peers, with gross premiums to capital at 1.1 times and reinsurance assets to capital at 1.3 times at year-end 2015.
Offsetting rating factors include TPI’s exposure to reinsurance counterparties that are of lower credit quality by international standards and of much smaller capital size than TPI. Moreover, these counterparties have the same geographic concentration as TPI.
Other offsetting rating factors are TPI’s weak profile in the retail segment and its reliance on
Positive rating actions are unlikely at present.
Negative rating actions could result from a material decline in TPI’s risk-adjusted capitalization due to a substantial increase in TPI’s reinsurance asset leverage or deterioration in TPI’s reinsurance asset quality.
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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Senior Financial Analyst
Moungmo Lee, +65 6589 8412
Managing Director, Analytics
Manager, Public Relations
Assistant Vice President, Public Relations