Fitch reiterates AA+ rating for Asuransi Sinar Mas

JAKARTA. Rating agency Fitch Ratings has affirmed the rating for insurance company PT Asuransi Sinar Mas’ (ASM) National Insurer Financial Strength (IFS) to stand at AA+ (idn) with stable outlook.

Fitch said in an official release that the rating reflected the company's strong market positioning in the nonlife insurance market, its consistent profitability and robust capitalization.

“The stable outlook reflects Fitch's expectation that the company will continue to maintain a sufficient capital buffer to support its operations and prudent reinsurance management to mitigate catastrophe risks,” Fitch said.

ASM’s operating performance has remained healthy with a pretax return on assets and return on adjusted equity amounting to 8.4 percent and 22.9 percent respectively at end-2012.

Its underwriting margin has also remained strong with a combined ratio consistently staying below 100 percent (end-2012: 80.5 percent).

Capitalization has remained strong with risk-based capitalization ratio amounting to 300.16 percent as of the end-2012.

“ASM’s core business market is Indonesia, which is prone to natural disasters such as earthquakes, forest fires and floods. Therefore, it is important for ASM to carefully manage its reinsurance program to support its operations and business growth,” Fitch said.