KUALA LUMPUR, Jan 10 -- Global credit rating agency, AM Best has removed from under review with negative implications and downgraded the Financial Strength Rating (FSR) to C (Weak) from B (Fair) and the Long-Term Issuer Credit Rating (Long-Term ICR) to ‘ccc+’ (Weak) from ‘bb+’ (Fair) of PT Asuransi Jasa Indonesia (Asuransi Jasindo) Indonesia.
The outlook assigned to the FSR is stable while the outlook assigned to the Long-Term ICR is negative.
These Credit Ratings (ratings) reflect Asuransi Jasindo’s balance sheet strength, which AM Best assesses as weak, as well as its marginal operating performance, neutral business profile and marginal enterprise risk management (ERM).
The ratings of Asuransi Jasindo were placed under review with negative implications on May 19, 2021, following a significant deterioration in the company’s underwriting performance emanating from its credit insurance business.
On July 8, 2021, the ratings were downgraded and maintained under review with negative implications, following a delay in the finalisation of the company’s 2020 audited financial statements and AM Best’s increased concern over the loss exposure from the company’s credit insurance business.
Based on a statement, the latest rating actions follow the finalisation of the company’s 2020 audited financial statements, which included restatements of prior financial years.
The company’s latest financial position shows a significant capital erosion from outsized losses in its credit insurance business. The rating downgrades reflect a weakening of AM Best’s view of Asuransi Jasindo’s balance sheet strength and operating performance fundamentals.
The negative outlook of the Long-Term ICR reflects AM Best’s expectation of continued pressure on the company’s balance sheet strength, operating performance and ERM fundamentals over the intermediate term.
While Asuransi Jasindo’s management team continues to implement a turnaround strategy aimed at restoring capital adequacy and improving prospective operating performance, significant execution and downside risks remain at present.
For more information, visit www.ambest.com.
-- BERNAMA
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