AM Best Affirms Credit Ratings and Assigns National Scale Rating to PT Asuransi Samsung Tugu

AM Best has affirmed the Financial Strength Rating (FSR) A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of PT Asuransi Samsung Tugu (AST) (Indonesia). Additionally, AM Best has assigned the Indonesia National Scale Rating (NSR) of aaa.ID (Exceptional) to AST. The outlook of these Credit Ratings (ratings) is stable.

The ratings of AST reflect its balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management. The ratings also recognise the wide range of support provided by AST’s parent, Samsung Fire & Marine Insurance Co., Ltd. (SFM).

AST’s risk-adjusted capitalisation is assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by its strong internal capital generation, low net underwriting leverage and highly conservative investment portfolio. Given its sizeable reinsurance exposure to domestic insurers under regulatory requirements, the company has moderately high counterparty credit risk, which is mitigated partially by affiliated and international reinsurance partners of high credit quality and SFM’s strict reinsurance counterparty monitoring.

AST’s operating performance is supported by its strong underwriting profitability and stable investment profits as demonstrated by a five-year average combined ratio of 57% (2018-2022) and a return-on-equity ratio of 9.9%, as calculated by AM Best. The company’s underwriting performance is mainly driven by its low expense ratio, which is attributed to large reinsurance commission income and low acquisition costs from the direct distribution channel. The company also benefits from relatively favourable loss ratios of Samsung group risks and the Korean Interests Abroad business compared with domestic Indonesia business.

Despite the inherent volatility in profitability due to the small net premium base, AM Best expects that AST’s strong underwriting profitability will remain supported by large commission income from increasing new Korean investments in Indonesia and its conservative underwriting for domestic Indonesia businesses.

AST is a joint venture between SFM and PT Asuransi Tugu Pratama Indonesia Tbk, which have 70% and 30% shareholding, respectively. AST mainly focuses on underwriting risks related to Samsung group affiliates and other Korean companies in Indonesia, which AM Best expects to remain largely unchanged over the medium term. AST’s exposure to the Indonesia market remains small given its limited domestic market access as a foreign player and SFM’s strict underwriting guidelines. The company shares the Samsung brand and is highly integrated into its parent, receiving support in various areas including key personnel, underwriting, pricing, marketing, risk management and information technology.

Negative rating actions could occur for AST if support from SFM is reduced to an extent that no longer supports the current level of rating enhancement. Negative rating actions could also occur if there is a sustained deterioration in AST’s operating performance, or its risk-adjusted capitalisation significantly deteriorates such as from heightened credit risk following major loss events due to its high reinsurance dependency. Positive rating actions could arise if there is a notable and sustained expansion of the company’s market presence leading to an improved business profile.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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