PT KB Insurance Indonesia has reported an increase in its premium retention rate, rising from 27% over the past three years to 31% in 2023, signaling a strategic shift towards enhancing its operational resilience and market presence. Despite this uptick, the insurer maintains a reliance on reinsurance that is lower than industry norms but is expected to gradually increase, particularly with a focused expansion in motor insurance offerings, according to Fitch Ratings.
The company, assessed to have a moderate company profile, benefits from a solid capital buffer and stable financial performance, albeit with significant dependence on reinsurance arrangements. This underscores its conservative approach to investments and operational stability in Indonesia’s insurance landscape.
As a subsidiary of South Korea’s KB Insurance, PT KB Insurance Indonesia leverages its parent company’s established brand and operational synergies, contributing to its strategic positioning despite its smaller scale in the market. Approximately 18% of its total gross premiums in 2023 were sourced from within the KB group, highlighting its integrated business strategy and collaborative advantages.
Fitch Ratings highlights PT KB Insurance Indonesia’s business franchise, with property insurance accounting for 58% and motor vehicle insurance for 22% of its total premiums in 2023, reinforcing its diversified portfolio strategy. The insurer maintains a satisfactory regulatory capital position, although its risk-based capital ratio decreased to 356% by the end of 2023 due to strategic business expansions.
Despite market challenges, PT KB Insurance Indonesia’s profitability remains robust, evidenced by a combined ratio of 77% in 2023 and a consistent return on equity averaging 6% over the past three years. The insurer’s conservative investment strategy allocates approximately 90% of its assets to cash, equivalents, and fixed-income securities, predominantly in government bonds, ensuring financial stability and resilience in dynamic market conditions.
