HONG KONG, October 24, 2025--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating of A- (Excellent), a Long-Term Issuer Credit Rating of "a-" (Excellent) and the Indonesia National Scale Rating (NSR) of aaa.ID (Exceptional) to PT Lippo General Insurance Tbk (LGI) (Indonesia). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect LGI’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also reflect the support that the company receives from its ultimate parent, Hanwha Life Insurance Co., Ltd. (Hanwha Life).

LGI’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), is assessed at very strong level, and is expected to remain supportive of the current balance sheet strength assessment over the medium term backed by internal capital generation. LGI has a moderate capital base but relatively high underwriting leverage due to its focus on the low-volatility health and short-term credit insurance lines, which require less capital to support. The company’s balance sheet is exposed to significant credit risk arising from sizeable cessions to domestic (re)insurers with weaker credit quality, in compliance with local regulations. However, AM Best notes a moderate allocation to global reinsurers with strong credit quality in LGI’s excess of loss programme, which can partially mitigate the potential elevation of credit risk in the event of high-severity losses. AM Best views the company’s investment strategy as moderately conservative with sufficient liquidity, and it is expected to be largely stable with a majority of assets placed in bonds and time deposits.

LGI’s operating performance is assessed as adequate, with a five-year (2020-2024) return-on-equity ratio of 8.0% and a combined ratio of 98.3%, as calculated by AM Best. LGI’s underwriting performance has demonstrated moderate volatility over the past five years, mainly due to the impact of the COVID-19 pandemic and medical cost inflation on its health insurance line’s profitability. The company has been actively mitigating these challenges through proactive measures to achieve rate adequacy in the health line and diversify its business portfolio. LGI’s expense ratio is relatively low compared to its domestic industry peers, helped by its business profile with limited high-expense motor insurance and a significant share of low-expense credit insurance. With an average investment yield of 4.0% over the past five years (2020-2024), investment profit is expected to remain an important contributor to LGI’s operating results.

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LGI is a listed medium-size non-life insurer in Indonesia with a strong market presence in the health insurance segment. While LGI has a moderately diversified mix of underwriting portfolio, with health being its key business line, its growth has outperformed the domestic industry in recent years driven by the entry into credit insurance, coupled with the impact of rate increases in health insurance. In terms of distribution, the majority of the company’s business is facilitated through brokers, although the channel mix has become more diversified with the recent expansion of its credit insurance line of business.

LGI receives rating enhancement from its parent, considering the company’s strategic importance to Hanwha Life as part of its global strategy to establish a financial hub in Indonesia. AM Best expects that Hanwha Life will provide capital support to LGI in times of need. The company receives various implicit support from Hanwha Life and Hanwha General Insurance Company Limited (a subsidiary of Hanwha Life), including the implementation of digital strategy, product development, information technology and key management personnel. Additionally, AM Best views LGI’s integration into Hanwha Life group as being well underway, including the planned change of its brand name to Hanwha within the next few years.

Negative rating actions could arise if LGI’s risk-adjusted capitalisation significantly deteriorates, such as from heightened credit risk following major loss events or from excessive business expansion that materially outpaces the capital growth. Negative rating actions also may arise if expected support from Hanwha Life does not materialise to an extent that it no longer supports the current level of rating enhancement. Positive rating actions could arise if there is a sustained improvement in LGI’s operating performance that positively distinguishes it from its industry peers.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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Contacts

Minji Cha 
Financial Analyst 
+852 2827 3424 
[email protected]

Chanyoung Lee 
Director, Analytics 
+852 2827 3404 
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Christopher Sharkey 
Associate Director, Public Relations 
+1 908 882 2310 
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Al Slavin 
Senior Public Relations Specialist 
+1 908 882 2318 
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