Asuransi Wahana Tata’s premium retention drops to 36% in 2024

Its combined ratio increased due to higher property claims and lower net premiums earned.

PT Asuransi Wahana Tata's (ASWATA)  risk management strategy relies heavily on reinsurance, particularly in property and engineering lines, which are exposed to catastrophe risks, according to Fitch Ratings.

Its premium retention ratio dropped to 36% in the first nine months of 2024, well below the industry's 59% average, highlighting its dependence on reinsurance.  

Its performance is underpinned by a "Moderate" company profile, reflecting its diversified business lines and adequate market presence, with a 2% share of Indonesia's non-life insurance market by gross premiums written (GPW) in 2023.

ASWATA’s financial results have shown some strain. Its combined ratio increased to 99% in 9M 2024 from 89% in 2023 due to higher property claims and lower net premiums earned. 

The company’s GPW declined slightly by 0.3% during this period, affected by a fall in motor vehicle premiums following lower vehicle sales in Indonesia. Return on equity also dipped to 13% in 9M24 from 15% in 2023.  

Despite these challenges, ASWATA maintains satisfactory capitalisation. Its regulatory risk-based capital (RBC) ratio rose to 395% at end-September 2024, significantly above the 120% regulatory minimum, supported by surplus growth and improved reinsurance credit quality. 

The company's investment strategy remains conservative, with around 80% of its assets in cash, equivalents, and fixed-income securities, ensuring adequate liquidity and minimal exposure to risky assets.