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Fitch affirms Adira Insurance rating
Fitch Ratings has affirmed Indonesia-based PT Asuransi Adira Dinamika's (Adira Insurance) National Insurer Financial Strength (IFS) Rating as âAA(idn)â, with a stable outlook
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F
itch Ratings has affirmed Indonesia-based PT Asuransi Adira Dinamika's (Adira Insurance) National Insurer Financial Strength (IFS) Rating as 'AA(idn)', with a stable outlook.
'AA' National IFS ratings denote a very strong capacity to meet policyholder obligations relative to all other obligations or issuers in the same country, across all industries and obligation types, according to Fitch in an official release on Tuesday.
The risk of ceased or interrupted payments differs only slightly from the country's highest rated obligations or issuers.
'The rating reflects Adira Insurance's sound operating performance and prudent investment strategy, relative to its peers. The company's gross written premiums grew by around 10 percent yoy [year-on-year] to Rp 1.43 billion, according to its unaudited financial statements at the end of September 2013. This compared with Rp 1.3 billion at the end of September 2012,' Fitch said.
'Health and motor vehicle insurance are both expected to continue being the main growth drivers of its premium income. The demand for the latter is supported by the expectation of steady sales of motor vehicles following government measures introduced in May 2013 to encourage the domestic manufacturing of low-cost green cars.'
Profitability has remained healthy with a return on assets and a return on average equity amounting to 9 percent and 31 percent respectively as of September - although net profit for January-September 2013 fell slightly due to lower investment income and higher operating expenses compared to a year earlier.
Adira Insurance has maintained a conservative investment mix with cash and equivalents accounting for 73 percent of its investment portfolio as of the end of September 2013.
Its equity portfolio has also been kept to a minimum, at around 1 percent of its total invested assets. Its business mix has not shown a material deviation from the previous year, with motor insurance accounting for 65 percent of its total gross written premiums as of the end of September 2013.
'The stable outlook reflects Fitch's expectation that Adira Insurance will continue to adopt prudent reinsurance management to mitigate catastrophe risks and maintain sufficient capital buffers to support its business operations,' Fitch said.
