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Feb 3 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has affirmed Indonesia-based PT Asuransi Ekspor Indonesia (Persero)'s (ASEI) Insurer Financial Strength (IFS) Rating and Long-Term Issuer Default Rating (IDR) at 'BBB-', respectively. Fitch has also affirmed ASEI's National IFS Rating and National Long-Term Rating of 'AAA(idn)', respectively. The Outlooks are Stable.
'AAA' National IFS Ratings denote the highest rating assigned within the national scale for that country. The rating is assigned to the policyholder obligations of the insurance entities with the lowest credit risk relative to all other obligations or issuers in the same country, across all industries and obligation types.
The ratings take into account ASEI's special policy role as the sole provider of export insurance for the non-oil & gas sector in Indonesia and its 100% government ownership. ASEI's role is set out under a clause in a decree by Indonesia's Ministry of Finance that says it will "issue for and on behalf of the State Export Credit Guarantees and Export Insurance.
ASEI has continued to maintain solid capital buffers to support its underwriting as measured by its risk-based capitalisation (RBC) ratio, which amounted to 566.84% as of end-June 2013 (end-2012: 552%). This is well above the minimum regulatory requirement of 120%.
ASEI's gross premiums amounted to IDR658.7bn as of end-June 2013, growing in line with the company's projection. Based on its unaudited financial report, ASEI's net profit amounted to IDR45.3bn for the financial year ended June 2013, which was similar to the previous year's result because the improving claims experience and lower expenses were offset by lower investment returns.
The key rating trigger for an upgrade to the International IFS rating is an upgrade in the sovereign rating, since ASEI's rating is strongly correlated to that of the Indonesian sovereign. ASEI's National IFS rating is already at the highest level. Key rating triggers for a downgrade for both the International and National IFS ratings include any reduction in the perceived likelihood of government support in times of need. A downgrade in the sovereign rating could also result in similar movement to the International IFS rating.