Credit insurance drives BRI's premium increase: Fitch Ratings

The insurer holds a 3% market share in Indonesia’s non-life industry, as of 2023.

Despite high reinsurance recoverables, BRI Insurance’s profitability remains stable, with a combined ratio of 55% in 2023, Fitch Ratings said.

Gross premiums written (GPW) increased by 27% in 2023, driven by its credit insurance business. BRI Insurance adopts a conservative investment strategy, with around 90% of its assets in cash, equivalents, and fixed-income securities.

Fitch Ratings perceives Indonesia-based BRI Inusrance’s financial standing to be supported by sustained underwriting profitability, with a combined ratio of 55% in 2023 (2022: 66%). 

The ratio averaged 61% over 2021-2023, underpinned by a low claim ratio and high reinsurance commission. Return on equity averaged 26% over the same period, said Fitch Ratings.

ALSO READ: Korean insurers immune from overseas CRE decay: Fitch Ratings

BRI Insurance holds a 'favourable' company profile, with a 3% market share in Indonesia's non-life industry in 2023. It has a strong synergy with its parent company, PT Bank Rakyat Indonesia (Persero) Tbk (BRI), contributing over 40% to its total GPW in 2023.

BRI Insurance maintains a satisfactory capital position, with a regulatory risk-based capital (RBC) ratio of 359% in 2023. The insurer also relies heavily on reinsurance to manage its risk, with a premium retention ratio of 48% in 2023.