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PT Asuransi Kredit Indonesia (Askrindo) rated “idAA+” with stable outlook

IM Press Release
By IM Press Release
3 months ago
PT Asuransi Kredit Indonesia (Askrindo) rated “idAA+” with stable outlook

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  1. Press Release January 28 , 2022 PT Asuransi Kredit Indonesia Analysts: Danan Dito / Hasnalia Hanifah Phone/Fax/E-mail: (62-21) 5096 8469/ 5096 8468 / danan.dito@pefindo.co.id / hasnalia.hanifah@pefindo.co.id CREDIT PROFILE Corporate Rating FINANCIAL HIGHLIGHTS* idAA+/Stable Rated Issues - Rating Period December 29, 2021 – December 1, 2022 Rating History DEC 2019 DEC 2018 DEC 2017 DEC 2016 DEC 2015 idAA+/Stable idAA+/Stable idAA+/Stable idAA+/Stable idAA/Stable As of/for the year ended Total Assets [IDR Bn] Total Equity [IDR Bn] Total Investment without Cash [IDR Bn] Net Premium Written [IDR Bn] Net Claims [IDR Bn] Underwriting Result [IDR Bn] Net Income After Tax [IDR Bn] ROAA [%] Loss Ratio [%] Net Premium Written / Equity [x] Retention Ratio [%] Equity/Total Assets [%] Risk Based Capital; RBC [%] USD Exchange Rate [IDR/USD] **Sep-2021 (Unaudited) 28,561.3 10,799.6 13,044.3 3,742.6 1,841.2 932.0 917.0 ***4.8 49.2 ***0.5 78.4 37.8 587.8 14,307 Dec-2020 (Audited) 22,066.4 7,427.0 10,270.2 4,318.0 2,113.3 1,494.3 1,108.9 5.3 48.9 0.6 67.2 33.7 403.2 14,050 Dec-2019 (Audited) 19,711.1 6,262.2 9,070.1 3,604.4 2,526.1 254.6 153.7 0.8 70.1 0.6 61.1 31.8 345.7 13,901 Dec-2018 (Audited) 16,719.8 6,345.3 8,415.0 3,016.3 1,828.6 511.8 509.2 3.2 60.6 0.5 68.6 38.0 422.1 14,481 * Based on stand-alone financial statement (not consolidated with subsidiaries) ** The figures have not factored the restatement on the previous period yet *** Annualized The above ratios have been computed based on information from the company and published accounts. Where applicable, some items have been reclassified according to PEFINDO’s definitions. PT Asuransi Kredit Indonesia (Askrindo) rated “idAA+” with stable outlook PEFINDO has assigned its “idAA+” financial strength rating to PT Asuransi Kredit Indonesia (Askrindo). The outlook for the rating is “stable”. An insurer rated idAA has very strong financial security characteristics relative to those of other companies in Indonesia, differing only slightly from those rated higher. The plus (+) sign indicates that the rating is relatively strong within its category. The rating reflects Askrindo’s important role to the Indonesian government, and its very strong business position and capitalization profile. However, these strengths are partly offset by its moderate operating performance. The rating may be raised if the government strengthens its support, accompanied by improvements in its financial indicators on a sustained basis. Conversely, the rating may be under pressure if the government support weakens markedly due to the diminishing role of Askrindo in supporting government programs. Following the releases of the audited financial statements for the year ended of December 31, 2020 (FY2020) in November 2021, and the audited financial statements for the year ended of December 31, 2019 (FY2019) in June 2021, we noted some errors in the presentation of premium reserves and claims as required by the PSAK 62 due to inappropriate calculations and the use of data as well as assumptions in the calculation process. These errors resulted in the understatement of the Group's premium reserve and claim balances as of December 31, 2018 (FY2018) and December 31, 2017 (FY2017). Accordingly, the restatement of the financial statements reduced Askrindo’s equity to IDR6.3 trillion and IDR5.8 trillion as of FY2018 and FY2017, from IDR8.7 trillion and IDR8.2 trillion, respectively. Despite the very significant amount of restatement, we view the impact to the Company’s financial indicators such as capitalization and liquidity profiles as manageable, particularly after the recent capital injection of Rp3 trillion related to the national economic recovery program (PEN). With this additional capital, Askrindo's equity base as of September 30, 2021 was recorded at IDR10.8 trillion, higher than the FY2018 pre-restatement figure of Rp8.7 trillion. In addition, given its important role for the Indonesian government, PEFINDO expects very strong and timely Government support to ensure Askrindo's financial resilience. Regardless of the indication of potential deficiency on its corporate governance in the past, as reflected on the significant value of the restatement, we view that this risk can be significantly mitigated with strict supervision from PT Bahana Pembinaan Usaha Indonesia (Persero) (BPUI), the holding company for state-owned insurance and guarantee companies. Askrindo must follow the parent company's standard corporate governance practices including accounting, risk management, and underwriting policies. Given the close oversight, we expect further material developments or incidences are unlikely to occur in the upcoming audit process. Askrindo provides insurance services for government’s micro credit program (KUR), bank loans and non-bank financing, trade credit insurance, surety and customs bonds, general insurance, and reinsurance services. Askrindo is 99.99% owned by PT Bahana Pembinaan Usaha Indonesia and the remainder by the Government of Indonesia through its Serie A Dwiwarna share. . http://www.pefindo.com January 2022
  2. Press Release January 28 , 2022 DISCLAIMER The rating contained in this report or publication is the opinion of PT Pemeringkat Efek Indonesia (PEFINDO) given based on the rating result on the date the rating was made. The rating is a forward-looking opinion regarding the rated party’s capability to meet its financial obligations fully and on time, based on assumptions made at the time of rating. The rating is not a recommendation for investors to make investment decisions (whether the decision is to buy, sell, or hold any debt securities based on or related to the rating or other investment decisions) and/or an opinion on the fairness value of debt securities and/or the value of the entity assigned a rating by PEFINDO. All the data and information needed in the rating process are obtained from the party requesting the rating, which are considered reliable in conveying the accuracy and correctness of the data and information, as well as from other sources deemed reliable. PEFINDO does not conduct audits, due diligence, or independent verifications of every information and data received and used as basis in the rating process. PEFINDO does not take any responsibility for the truth, completeness, timeliness, and accuracy of the information and data referred to. The accuracy and correctness of the information and data are fully the responsibility of the parties providing them. PEFINDO and every of its member of the Board of Directors, Commissioners, Shareholders and Employees are not responsible to any party for losses, costs and expenses suffered or that arise as a result of the use of the contents and/or information in this rating report or publication, either directly or indirectly. PEFINDO generally receives fees for its rating services from parties who request the ratings, and PEFINDO discloses its rating fees prior to the rating assignment. PEFINDO has a commitment in the form of policies and procedures to maintain objectivity, integrity, and independence in the rating process. PEFINDO also has a “Code of Conduct” to avoid conflicts of interest in the rating process. Ratings may change in the future due to events that were not anticipated at the time they were first assigned. PEFINDO has the right to withdraw ratings if the data and information received are determined to be inadequate and/or the rated company does not fulfill its obligations to PEFINDO. For ratings that received approval for publication from the rated party, PEFINDO has the right to publish the ratings and analysis in its reports or publication, and publish the results of the review of the published ratings, both periodically and specifically in case there are material facts or important events that could affect the previous ratings. Reproduction of the contents of this publication, in full or in part, requires written approval from PEFINDO. PEFINDO is not responsible for publications by other parties of contents related to the ratings given by PEFINDO. http://www.pefindo.com January 2022