PT Tugu Reasuransi records $7m net profit in H1 2024

The company holds an 11% market share in Indonesia's reinsurance sector.

PT Tugu Reasuransi Indonesia (Tugure) has consistently maintained its regulatory risk-based capital (RBC) ratio above the 120% minimum requirement over the past five years, standing at 166% by mid-2024, according to Fitch Ratings.

“Fitch expects the combined ratio to remain volatile due to the reinsurer's exposure to claim risk from the property and credit insurance businesses,” it said in a report.

Financial performance has been mixed, with a combined ratio rising to 107% in 2023 before improving to 100% in the first half of 2024. Tugure recorded a net loss of $2.27m (IDR36b) in 2023, following a profit of $6.36m (IDR101b) in 2022.

Nonetheless, the reinsurer returned to profitability in the first half of 2024, posting a net profit of $6.68m (IDR106b), aided by reduced technical reserves.

Although lower than 181% in 2023 and 249% in 2022 due to increased technical reserves for property and credit insurance, the company's equity remains above the $63m (IDR1t) threshold set to take effect in 2026.

The company holds an 11% market share in Indonesia's reinsurance sector, driven by diversified business lines with a significant focus on property (43%) and credit (26%) insurance.

Gross premiums written (GPW) grew by 26% in the first half of 2024, outpacing the wider market's 20% increase. However, Fitch notes that this rapid expansion could heighten risks to Tugure's capitalisation and financial performance.

Whilst Tugure demonstrates a stable capital position and prudent risk management, Fitch expects its financial performance to remain volatile, particularly given its exposure to claim risks in the property and credit insurance segments.

($1.00 = IDR15,850.00)