SINGAPORE, Oct 9 (Bernama-BUSINESS WIRE) — AM Best is maintaining a negative outlook on the Indonesia non-life insurance segment, citing heightened reinsurance credit risk and potential pressure on underwriting margins owing to rising reinsurance costs and more-restrictive coverages.
The Best’s Market Segment Report, “Market Segment Outlook: Indonesia Non-Life Insurance,” states that the primary non-life market’s exposure to reinsurance counterparty credit risk has worsened as the financial strength of several domestic reinsurers has deteriorated in recent years due to outsized losses in their life, health and credit insurance lines. AM Best expects primary insurers’ underwriting margins to come under pressure because of the hardening reinsurance market as well.