, Hong Kong
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AM Best projects “modest profitability” for Tugu Insurance

The company’s financial performance was mixed in 2023.

Tugu Insurance Company Limited (TIC) is seen to maintain modest profitability over the intermediate term amid mixed financial indicators, AM Best said.

The ratings agency said TIC’s balance sheet, marginal operating performance, limited business profile, and marginal enterprise risk management were strong. The company’s risk-adjusted capitalisation was also at its strongest level, which is seen to continue over the short to intermediate term. 

TIC also demonstrated a volatile bottom line from its underwriting and investment experience. The loss ratio deteriorated in 2021 and 2022 due to large losses from the oil and gas business but improved in 2023 along with the benefits from some claim reserve releases for previous accident years. 

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However, the operating expense ratio remains high with a limited premium base. Despite stable rental income from investment properties, and interest and dividend income arising from liquid assets, TIC experienced investment losses in 2022 and 2023 due to a decline in the fair value of investment properties. 

TIC has been operating since 1965, but it remains a small player in Hong Kong’s non-life insurance market, AM Best noted. It obtains a significant portion of its revenue from its parent PT Pertamina, but it has also expanded its sources to domestic and overseas businesses.

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