Artarindo's premium retention lags behind industry

However, its profitability is expected to remain stable.

Fitch Ratings expects PT Asuransi Artarindo to maintain sufficient capital to support business expansion, with a regulatory risk-based capital (RBC) ratio of 438% at the end of 2023, down from 503% in 2022.  

This remains well above the minimum regulatory requirement of 120% and higher than the industry average of 338%. The company’s equity of $16.51m (IDR254b) in July 2024 exceeds the 2026 regulatory requirement of $16.25m (IDR250b).  

Profitability is expected to remain stable, driven by solid underwriting performance. In 2023, the combined ratio was 79%, better than the industry average of 93%.  

Return on equity was 11% in 2023, with a three-year average of 12%, supported by steady investment income.  

Fitch anticipates the company's reliance on reinsurance to remain high, as it continues to expand its property insurance portfolio in Indonesia, which is prone to natural disasters. Artarindo’s premium retention ratio stood at 44% in 2023, below the industry average of 56%.  

Artarindo is expected to maintain a liquid investment portfolio, with around 80% of its assets in cash equivalents and fixed-income securities, ensuring prudent investment practices going forward.

($1.00 =  IDR15,422.60)