Liga Asuransi – In the fourth week of December 2023, we talk again about the world of insurance because insurance is not only limited to vehicles and life, especially for business protection coverage, insurance still has a very wide reach. In the third week of December 2023, we are again collecting 7 selected news related to insurance that are good for you to know.
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The Impact of the Constitutional Court Decision on Criminal Investigations in the Financial Services Sector
The decision of the Constitutional Court (MK) to delete the phrase “only” in Article 8 Number 21 of Law (UU) Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (UU P2SK) has attracted the attention of insurance experts. This decision, which was announced on Thursday (21/12/2023) in Constitutional Court decision number 59/PUU-XX/2023, triggered various responses from experts, especially regarding the handling of criminal acts in the financial services sector.
According to Lecturer and General Chair of the Indonesian Insurance Writers Community (Kupasi), Wahyudin Rahman, the Constitutional Court’s decision can provide an opportunity for customers in the financial services sector to take legal action through the police if a criminal act occurs in the financial sector. Although considered wise, Wahyudin also expressed concerns regarding the independence and limitations of investigative personnel from the Financial Services Authority (OJK).
Wahyudin highlighted several potential problems if investigators came from outside the OJK. First, he emphasized that the integrity and competence of investigators in the financial sector may not be sufficient. Second, there is the risk of easily becoming the object of a pre-trial lawsuit in court. According to him, the financial sector is a vulnerable industry, where customers who do not have good intentions can easily report financial institutions without filters, often being followed up by law enforcement, even with financial motives.
Wahyudin suggested that through the OJK, at least administrative sanctions could be applied first before reaching the criminal level. Therefore, with the Constitutional Court’s decision, Wahyudin is of the opinion that the OJK, the Indonesian Police (Polri), and related stakeholders need to redesign their cooperation agreements to achieve harmonization in the handling and authority of investigators within and outside the OJK.
In its decision, the Constitutional Court stated that the phrase “can only be carried out by investigators from the Financial Services Authority” in Article 8 Number 21 of the PPSK Law is contrary to the 1945 Constitution of the Republic of Indonesia. The Constitutional Court determined that investigations into criminal acts in the financial services sector can be carried out by OJK investigators. This decision has a significant impact on the dynamics of handling criminal acts in the financial sector which needs to be accommodated by relevant stakeholders.
Anticipate Challenges, Hardening Market Conditions in the Insurance and Reinsurance Industry Next Year
The insurance and reinsurance industry is predicted to continue to face hardening market conditions in the coming year. Wahyudin Rahman, a Lecturer and Risk Management Practitioner, as well as General Chair of the Indonesian Insurance Writers Community (Kupasi), revealed that the frequency of market hardening will likely begin to decrease, along with the adaptation of international rates by the insurance and reinsurance industry.
Wahyudin explained that domestic insurance/reinsurance rates are currently lower than international rates. Domestic insurance and reinsurance premium prices have not increased, even though inflation and costs continue to grow. This has an impact on limited reinsurance capacity or support, resulting in several insurance coverages that are not fully insured.
“Most customers tend to be self-insured or are not even interested in protecting themselves,” he added. This condition, according to Wahyudin, could result in degradation of penetration and market share. The solution, according to him, is to adjust domestic market prices and increase education, especially for brokers and agents.
On the other hand, the Indonesian General Insurance Association (AAUI) predicts that market hardening conditions will continue in the global insurance and reinsurance industry in 2024. AAUI Chairman, Budi Herawan, expressed his concern about the insurance and reinsurance business in Indonesia in the coming year, considering the capacity for the renewal treaty, it is likely that there will be a decrease.
Budi emphasized that to overcome this challenge, support is needed from various parties, especially insurance providers, to achieve common goals. Apart from that, support from regulators or the Financial Services Authority (OJK) is also expected to increase collaboration and growth in the insurance industry in the future.
Increasing Achievements, Allianz Indonesia Records Double-Digit Growth in Travel Insurance Premiums
PT Asuransi Allianz Utama Indonesia or Allianz Indonesia recorded positive achievements with travel insurance premium growth reaching double-digit growth. Until November 2023, Allianz Utama Indonesia recorded an increase of more than 10% compared to the previous year. Alwin Jasim, Head of Personal Lines & Product Development at Allianz Utama Indonesia, said that this growth was in line with the increase in people’s travel activities for business and leisure purposes.
“This achievement makes travel insurance one of the main insurance products that makes a significant contribution to the company’s premium income, with the travel insurance GWP portion reaching 12% of the company’s total GWP,” said Alwin to Bisnis on Tuesday (19/12/2023).
Alwin said that the increasing demand for travel insurance was also influenced by post-pandemic conditions, where people are increasingly aware of the importance of insurance protection when traveling. The increase in premium income is also reflected in public holidays, especially before Christmas and New Year (Nataru).
“With positive growth projections, Allianz Indonesia continues to be committed to providing innovative protection that suits customer needs, providing peace of mind when traveling,” added Alwin.
2024 Business Strategy: PertaLife Insurance and Tugu Insurance Aim to Increase Non-Captive Market Portion
Insurance companies under the auspices of the Pertamina conglomerate, namely PT Perta Life Insurance (PertaLife Insurance) and PT Asuransi Tugu Pratama Indonesia Tbk. (Tugu Insurance), have revealed their business plans for 2024. Both companies aim to expand their non-captive market in the coming year. PertaLife, which is controlled through the Pertamina pension fund, is focused on increasing premium production in 2024, with growth expected to come from health insurance products, work accident programs, severance pay, compensation, pensions and lifetime death benefits. PertaLife will also be involved in expanding sharia products through the PertaLife Financial Institution Pension Fund (DPLK). The company plans to increase sales digitally while maintaining a traditional approach.
“This is done to expand the non-captive market share which currently reaches 35%,” said Hanindio W. Hadi, President Director of PertaLife Insurance. Hanindio hopes to achieve a portfolio balance of 48% by 2024 through business expansion outside the scope of BUMN and through reciprocal partnerships with industrial insurance players.
Meanwhile, Tugu Insurance will focus on growing the non-captive sector by targeting BUMN and brokers in 2024. In the third quarter of 2023, Tugu Insurance recorded an increase in parent gross premiums of 26%, with a captive market share of 35% and non-captive market share of 65%. %.
President Director of Tugu Insurance, Tatang Nurhidayat, stated that the company will continue to improve its performance by implementing a strategy focused on product innovation and channel distribution for the MSME and BUMN markets, optimizing non-captive business development, digital transformation, and improving investment portfolio performance.
This business plan reflects the commitment of both companies to continue expanding and optimizing market penetration, making them key players in the insurance industry in Indonesia.
Julo Collaborates with BPJS Employment to Present Digital Insurance Services Through Julo Peduli
PT Julo Teknologi Finansial (Julo) has established a partnership with the Employment Social Security Administration (BPJS) to facilitate access to insurance services for the Indonesian people through a digital credit platform. The new service, which was launched on December 15, 2023, is called “Julo Peduli,” which not only offers health insurance protection but also involves insurance protection for devices from various risks of damage. The collaboration between Julo and BPJS Employment provides automatic insurance protection, especially in the form of Work Accident Insurance (JKK) and Death Insurance (JKM) for participants registered in the Non-Wage Earning Workers (BPU) membership segmentation.
William Eka, Head of Partnership Julo, stated that this collaboration is an important initiative to introduce Social Security protection with an affordable and easy insurance mechanism, especially for young people. Adrianus Hitijahubessy, CEO and Co-Founder of Julo, added that Julo is the first digital credit platform in Indonesia that provides life insurance and gadget insurance through Julo Peduli, enabling users to meet their daily financial needs through the Julo application.
According to BPJS Employment data as of November 2023, there are 51,303 active participants in the BPJS Employment protection program. Deny Yusyulian, Head of the BPJS Employment DKI Jakarta Regional Office, welcomed the launch of Julo Peduli as an innovative step in technology-based financial services to provide insurance protection to users. He hopes that the synergy between the two entities can continue to be improved, especially related to improving payment channels and BPJS Employment registration which is integrated in the Julo application.
With the level of insurance penetration in Indonesia still low, it is hoped that Julo Peduli can be an innovative solution to increase insurance accessibility and literacy among the Indonesian people.
OJK and Ministry of Health Strengthen Indonesia’s Health Insurance Ecosystem
The Financial Services Authority (OJK) and the Ministry of Health have announced the signing of a memorandum of understanding (MoU) as a joint step to strengthen the health insurance industry in Indonesia. Head of the OJK Literacy, Financial Inclusion and Communication Department, Aman Sentosa, stated that this MoU aims to strengthen the health industry ecosystem by optimizing support from the financial services sector. This memorandum of understanding includes the synergy of tasks and functions between the OJK and the Ministry of Health, which is expected to increase the efficiency of health services to the community.
Aman Sentosa explained that this synergy is a strategic step by OJK to increase public trust in the national insurance sector. This is in accordance with the Roadmap for Development and Strengthening Indonesian Insurance 2023–2027, with a focus on optimizing insurance sector support in the health industry ecosystem in Indonesia.
The scope of the MoU includes coordinating policies in the health sector with the financial services sector, support in monitoring health services related to insurance companies, coordinating health service funding, as well as utilizing digital information technology and increasing financial literacy. Aman Sentosa emphasized that the insurance sector has a crucial role in the health industry ecosystem, as a risk mitigation method to protect the welfare of society from individual health risks.
Implementation of this MoU will involve further discussion and deepening of technical cooperation, including the formation of a Cooperation Agreement or other forms of cooperation. OJK is committed to proactively strengthening the health insurance industry in Indonesia and improving health services to the public.
Jiwasraya Offers a Restructuring Program until the End of 2023. Last Chance for Policy Holders
PT Asuransi Jiwasraya (Persero) again provides policyholders with the opportunity to take part in the restructuring program offered. This program is provided until the end of December 2023, with the hope that its implementation at PT Asuransi Jiwa IFG (IFG Life) can be completed by December 31 2023. This Jiwasraya policy restructuring program was initiated by the government, especially the Ministry of BUMN, as an effort to protect the policy benefits of Jiwasraya insurance participants from potential for further losses, considering the company’s financial condition has been under pressure in recent times.
Jiwasraya Insurance Company Secretary, Kompyang Wibisana, explained that this program aims to guarantee that policyholders who take part in the restructuring will receive certainty regarding benefits in the new entity. He added that for those who are not willing to take part in the restructuring program, the policy will remain with Jiwasraya, and the return of benefits will refer to the company’s regulations and conditions.
“We urge and hope that policyholders who have not registered for the restructuring program can do so no later than December 31 2023,” said Kompyang to Bisnis. Until November 2023, around 99.6% of Jiwasraya policyholders have participated in the restructuring program. Of this percentage, around 84% of policies restructured at Jiwasraya have been transferred to IFG Life as a new entity that will continue providing benefits to participants.
This article is brought to you by L&G Insurance Broker, an insurance broker in Indonesia.
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