Fitch Ratings has lowered Asuransi Asei Indonesia's national insurer financial strength rating to BBB+(idn) from A(idn) and placed it on Rating Watch Negative, according to a Friday release.

The rating action considers the erosion in the insurer's capital position and financial profile as seen in its unaudited December 2024 report, Fitch said.

The insurer's reserves face volatility and could continue to dampen capitalization and financial performance, which prompted Fitch to issue the Rating Watch Negative placement.

The insurer posted a regulatory risk-based capital (RBC) ratio of 131% at the end of 2024, declining from 265% a year ago and modestly above the 120% minimum regulatory requirement, Fitch said.

Asei also reported a net loss of 73 billion rupiah in 2024 and a 24% drop in gross premiums, driven by higher reserves and a weakening credit insurance segment.

The rating agency views the insurer as having a "less favorable" company profile given its limited business franchise and greater risk appetite.

Notable shifts in the company's RBC ratio, operating performance as seen in its combined ratio and return on equity, and company profile would trigger future rating actions, Fitch said.