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July 17 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has affirmed Indonesia-based PT Asuransi Jiwa Sinarmas MSIG's (Sinarmas MSIG) National Insurer Financial Strength (IFS) Rating at 'AA+(idn)'. The Outlook is Stable. The agency has simultaneously withdrawn all the ratings.
Fitch has withdrawn the rating as Sinarmas MSIG has chosen to stop participating in the rating process. Fitch has determined that Sinarmas MSIG's public disclosures are not sufficient to allow the agency to maintain the ratings. Accordingly, Fitch will no longer provide ratings or analytical coverage for Sinarmas MSIG.
Key Rating Drivers
The rating reflects Sinarmas MSIG's significant market presence in Indonesia, healthy operating performance and strong capitalisation for its business profile. Sinarmas MSIG's risk-based capitalisation (RBC) ratio amounted to 562% at end-2012, well above the minimum requirement of 120%.
The insurer continues to face challenges in improving its premium sustainability as singular premiums dominate its business portfolio. Fitch believes that the insurer's operating profile will benefit from its greater focus on regular premium products as opposed to single-premium products.
The Stable Outlook reflects Fitch's view that Sinarmas MSIG will continue to maintain healthy capitalisation to support its business expansion and mitigate possible volatility arising from its investment results.
With more than 20 years of experience in the life insurance sector in Indonesia, Sinarmas MSIG's market dominance will be underpinned by its strongly entrenched market positioning and franchise as well as by continued support from its affiliates, the Sinar Mas and Mitsui Sumitomo Group.
Sinarmas MSIG is the second-largest life insurer in Indonesia with a 10% market share as of end-2012.