Tokio Marine Indonesia's capital holds strong despite reinsurance risk

AM Best expects risk-adjusted capitalisation to stay at its strongest level.

PT Asuransi Tokio Marine Indonesia (TMI) is expected to maintain its strongest level of risk-adjusted capitalisation over the medium term, supported by continued internal capital generation and a conservative investment strategy.

AM Best said TMI’s balance sheet strength remains strong, underpinned by capital adequacy at the highest level under Best’s Capital Adequacy Ratio (BCAR) model as of the end of 2025. 

The insurer’s shareholders’ equity rose 21% in 2025 after it retained its full earnings for the year.

The agency expects TMI’s capital position to remain stable, supported by its history of generating earnings internally. 

The company also maintains a conservative investment portfolio, consisting mainly of government bonds, cash and deposits.

However, AM Best noted that balance sheet strength is partly constrained by TMI’s moderate reliance on reinsurance and elevated counterparty credit risk due to its exposure to domestic insurance and reinsurance companies that do not carry international financial strength ratings.

AM Best also expects the insurer’s operating performance to remain strong, supported by consistent earnings and favourable underwriting results. 

TMI recorded a combined ratio of 84% in 2025, based on AM Best’s calculations, reflecting low claims experience across its key business lines. 

Investment income, particularly from interest-bearing assets, is also expected to continue providing a stable contribution to earnings.

The agency described TMI’s business profile as limited, reflecting its relatively small position in Indonesia’s non-life insurance market.

The company held a 2% share of gross premiums written in 2025.

Despite its size, TMI is expected to benefit from a moderately diversified portfolio across fire, marine and motor insurance. 

The insurer also continues to gain support from its affiliation with Tokio Marine Holdings through access to Japanese interest abroad-related risks in Indonesia.