PT KB Insurance sees growth in premium retention to 31%

The insurer also benefits from being an important subsidiary of S. Korea's KB Insurance.

PT KB Insurance Indonesia maintains a high reliance on reinsurance, with a premium retention rate of 27% over the past three years (rising to 31% in 2023), lower than industry norms. However, Fitch Ratings expects the figure to climb gradually whilst the company focuses on motor offerings.

The insurer is also assessed to have a moderate company profile and satisfactory capital buffer, albeit with significant reliance on reinsurance. The rating underscores the stable financial performance and conservative investment approach of KB Insurance Indonesia.

KB Insurance Indonesia benefits from being an important subsidiary of South Korea's KB Insurance, leveraging the parent company's brand and operational synergies despite its smaller scale. 

In 2023, approximately 18% of its total gross premiums were sourced from the KB group.

Fitch assesses KB Insurance Indonesia's company profile as moderate, supported by a solid business franchise in property (58% of 2023 premiums) and motor vehicle insurance (22%). 

The insurer maintains a satisfactory regulatory capital position, although its risk-based capital ratio decreased to 356% by end-2023 due to business expansion.

Its profitability remains stable, with a combined ratio of 77% in 2023 and a consistent return on equity averaging 6% over the last three years.

KB Insurance Indonesia follows a conservative investment strategy, primarily allocating 90% of its assets to cash, equivalents, and fixed-income securities, predominantly government bonds.