Fitch Ratings Indonesia has raised Meritz Korindo Insurance's national insurer financial strength rating to AAA(idn) from A+(idn), with a stable outlook, according to a Wednesday release.
The rating agency now considers the insurer as a "very important" strategic entity for its South Korea-based parent, Meritz Fire & Marine Insurance, due to its continued record of ownership and linkages with the group.
The parent, a subsidiary of Meritz Financial Group (KRX:138040), has retained solid fundamentals given its local capital adequacy ratio of above 220% and ROE exceeding 30% in the previous three years, Fitch said.
Meanwhile, the Indonesia-based insurer's risk-based capital ratio jumped to 752% in 2024 from 512% the previous year amid lower claim reserves, the rating agency said.
However, the insurer has a "less favorable" company profile, exhibited in its 0.2% market share in the country's nonlife industry gross premiums for last year.
Significant erosion in the company's capitalization or a change in Fitch's view of the insurer's strategic importance to its parent could lead to a negative rating action.
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