Pemeringkat Efek Indonesia (Pefindo), the first independent credit rating agency in Indonesia, has granted a financial strength rating of 'idA-' with a 'Stable' outlook to Reasuransi Syariah Indonesia.
ReIndo Syariah, which started operations in 2016, is the first fully fledged retakaful entity in Indonesia.
"The rating reflects a strong likelihood of support from Reasuransi Indonesia Utama (Indonesia Re or the parent), moderate asset quality, and adequate liquidity," Pefindo said in a statement.
However, this rating is constrained by increasing pressure on ReIndo Syariah's capital profile, below-average operational performance, and challenges in increasing Shariah insurance penetration, says Pefindo.
ReIndo Syariah provides reinsurance services, both life and general reinsurance, based on Shariah principles. The company was initially established as a Shariah business unit of Indonesia Re and was subsequently spun off in June 2016. Indonesia Re is ReIndo Syariah's major shareholder with a 99.9975% stake.