Pefindo Grants idA+ Rating To Anthony Salim's Conglomerate-Owned Insurance Company With Stable Prospects

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JAKARTA - PT Pemeringkat Efek Indonesia (Pefindo) has assigned an idA+ rating to PT Asuransi Central Asia (ACA) with a stable outlook. The rating, according to Pefindo, is based on ACA's strength as a parent entity.

In its official statement, quoted on Thursday, April 22, Pefindo said that an insurance company rated idA+ has strong financial security characteristics compared to other companies in Indonesia. However, it may be more adversely affected by changes in business conditions than other insurance companies with a higher rating.

"The plus sign (+) indicates that the rating given is relatively strong and above the average of the respective category", explained Pefindo.

The ratings reflect ACA's very strong business position, strong capitalization and reserves, and strong liquidity. However, the ratings are constrained by moderate operating performance and exposure to capital market volatility.

"We are of the view that the COVID-19 pandemic has a moderate impact on the production of new business in the insurance industry, especially the business class that is directly affected, such as motor vehicles, engineering, and suretyship", they added.

However, Pefindo estimates that the company can manage the impact of the pandemic because of its managed credit profile. Given, the company has a strong position in the general insurance industry as well as in terms of capital and reserves.

This is also supported by a large number of liquid assets in the form of deposits and securities, strict supervision of the quality of receivables, and a high RBC ratio of 349.8% as of 31 December 2020.

However, Pefindo noted that the economic downturn due to the pandemic has reduced new premium income in several business classes, as well as investment income. The rating may be raised if ACA can improve its business performance in a significant, sustainable, and consistent manner.

On the other hand, the rating may be lowered if there is a substantial decline in the company's business position, or if its operating performance and liquidity indicators have decreased significantly.

ACA was founded in 1956. ACA is the main insurance company covered by the Salim Group, with a wide range of general insurance products including protection against fire, earthquake, vehicles, credit insurance, personal accidents, cargo, construction, ship hulls, surety, liability, and others.

Currently, according to data from various sources obtained by VOI editorial team, ACA's shareholders consist of Anthony Salim conglomerate of 33 percent, PT Asian International Investindo 32 percent, PT Lintas Sejahtera Langgeng 18.93 percent, and several other shareholders who have a portion of ownership in below 5 percent.