Reinsurance in Indonesia could affect capital requirements: Analysis

A.M. Best Co. Inc. said that the high utilization of reinsurance among Indonesian nonlife insurers could have a substantial effect on capital requirements, Asia Insurance Review reported.

The high reinsurance utilization could also magnify the capital effect of changes to reinsurance asset quality, said the rating agency.

"To avoid disproportionate negative impacts on capital ratios, it is important that such non-life insurers keep reinsurance asset growth at a prudent pace relative to capital growth," said an official.

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