Liga Asuransi – The development of the insurance industry is always interesting to follow, and this time we have summarized 7 news related to insurance that you should know.
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OJK Will Classify Insurance Companies According to Capital, AAUI: Information is Still Insufficient
The Indonesian General Insurance Association (AAUI) stated that information from the Financial Services Authority (OJK) regarding plans to classify insurance companies based on capital still needs to be available.
AAUI Executive Director, Bern Dwyanto, supports the government’s efforts to nourish and strengthen the insurance industry. AAUI will be actively involved in discussions regarding the current industry focus, including clustering plans.
According to Dwyanto, information regarding the classification model provided by OJK still needs to be improved, so it requires further discussion and study before being implemented in the industry. Plans regarding the types of products allowed to be sold by insurance companies based on capital will also be discussed with the OJK.
“In this case, OJK is still reviewing the regulation, so further discussions between OJK, associations, and industry players are still needed,” Dwyanto told Bisnis on 20 July 2023.
If later there are insurance companies, both new and existing ones, that cannot meet the requirements to become tier I and II by 2026, as requested, OJK has suggested consolidating.
However, it is more than just the issue of classification based on capital that needs attention in today’s insurance industry. The first step that must be taken immediately is to improve market conditions in the general insurance industry to make it more conducive.
Dwyanto believes that by improving industrial market conditions, general insurance companies can generate greater profits. This, in turn, will increase the equity of each insurance company.
Thus, it is hoped that there will be another positive impact that the industry will feel in line with the improvement in market conditions, which will be a driving force for the growth of the insurance industry in a healthy manner.
OJK Issues Insurance Spin-Off Rules, This Sharia Unit Is Ready to Be Separated from Its Parent
The Financial Services Authority (OJK) has issued OJK Regulation Number 11 of 2023, which regulates the spin-off of Sharia Units in Insurance Companies and Reinsurance Companies. This regulation requires insurance and reinsurance companies with Sharia business units (UUS) to spin off by December 31, 2026.
Suppose the insurance and reinsurance companies do not separate the Sharia Units according to the specified time limit. In that case, the OJK can revoke the permit to form a Sharia Unit. This spin-off process is carried out by establishing a new Sharia company. If the company still needs to meet the minimum capital requirements, the company must make additional capital.
Additional capital in Sharia Units can come from insurance and reinsurance company shareholders, new investors, or from transferring the entire participant portfolio to a Sharia Insurance Company or a Sharia Reinsurance Company that already has a business license.
To qualify for a spin-off, the company must ensure that the value of the tabarru funds and investment funds of the Sharia Unit participants reaches at least 50% of the total value of the insurance funds, tabarru funds, and investment funds of the participants in their parent company. In addition, the minimum equity required for the Sharia Unit is IDR 100 billion for insurance companies and IDR 200 billion for reinsurance companies.
Insurance and reinsurance companies with Sharia units must submit changes to the work plan to separate Sharia units to regulators by December 31, 2023, at the latest.
Several insurance companies have stated their readiness to follow the UUS spin-off rules set by the regulator.
PT BRI Asuransi Indonesia or BRI Insurance plans to spin off in 2024, while PT Asuransi Allianz Life Indonesia (Allianz Life Indonesia) has finalized preparations and is targeting to carry out a spin-off in early semester II-2023. The two companies are committed to complying with regulations and implementing the separation of Sharia Units by applicable laws.
The Deadline for the Separation of UUS Insurance and Reinsurance is, at the latest, at the end of 2026
The Financial Services Authority (OJK) has issued OJK Regulation (POJK) Number 11 of 2023 concerning the Separation of Sharia Units for Insurance and Reinsurance Companies, which requires these companies to carry out a separation or spin-off of Sharia business units (UUS) no later than 31 December 2026.
This rule states that insurance and reinsurance companies that own UUS must carry out the separation by a set time limit. If the specified time limit does not carry out the break, OJK has the right to revoke the permit to form a UUS. If the UUS license is revoked, the affected insurance or reinsurance company must settle the policyholders’ and participants’ rights and obligations.
The regulation covers the purpose of separating UUS to strengthen the structure of resilience and competitiveness of the insurance and reinsurance industry and create more effective and efficient business operations. In addition, the separation of UUS will strengthen investment in technology and human resources and protect the interests of policyholders and participants.
UUS separation can be carried out based on three criteria, namely when the Sharia Unit meets specific requirements set by the OJK, there is a request from the insurance or reinsurance company itself, or it is carried out as part of OJK’s authority in the context of consolidation.
To fulfill the separation requirements, insurance and reinsurance companies must ensure that the value of the tabarru’ funds and investment funds of UUS participants reaches at least 50 percent of the total value of insurance funds, tabarru funds, and investment funds of participants in their parent company.
In addition, UUS minimum equity must reach at least IDR 100 billion for insurance companies and IDR 200 billion for reinsurance UUS, based on the latest annual financial statements audited by a public accountant.
OJK also emphasizes that during the UUS separation process, if assets and/or equity experience a decline and no longer meet the requirements, this condition will not eliminate the obligation of insurance and reinsurance companies to carry out Sharia unit separation by applicable regulations.
Asian Life Insurance Agent Grows Fast, MDRT Reminds The Code of Ethics Must Be Upheld
President of the Million Dollar Round Table (MDRT), Peggy Tsai, encouraged MDRT, as a forum for insurance professionals from various countries, to be optimized as a learning place for professional insurance agents to provide better customer service.
Peggy Tsai stated that MDRT is a great vehicle for excellent life insurance agents. For this reason, it is essential to uphold the code of ethics to provide better customer service, he said in a statement on Thursday (13/7).
He confirmed that MDRT would celebrate its 100th year in the next three years. During this time, the MDRT platform faced many challenges and changes, especially with the shift in the growth of professional insurance agents to the Asian region.
MDRT currently has over 90,000 members of the world’s leading life insurance and financial services professionals from 500 companies in 70 countries. MDRT has also developed 600 MDRT Academies and 200 Global Services in various countries.
This aims to ensure that MDRT membership is recognized internationally as a high-quality life insurance and financial services industry standard.
Dedy Setio, MDRT Indonesia Country Chair, revealed that the number of MDRT members in Indonesia had reached 2,283 people, which is expected to continue to increase along with increased public awareness about the need for post-pandemic insurance.
To become an MDRT member, a life insurance agent must meet the requirements by achieving a premium
of IDR 576 million to reach the MDRT level. There are three levels of MDRT membership, namely Court of the Table with a premium of IDR 1.72 billion (3 times the MDRT level) and Top of the Table with a premium of IDR 3.45 billion (6 times the MDRT level).
The premium amount must be collected from the policy in the first year from January 1, 2023, to December 31, 2023. After reaching a certain level, members must register before March 1, 2024, and pay membership fees according to their level.
Becoming an MDRT member has four main benefits. First, members get a global network that connects with MDRT members worldwide. Second, they find online resources to increase productivity through the MDRT website, the MDRT app, and the “Round the Table” magazine, which contains videos, audio, and articles. The third benefit is the opportunity to attend annual meetings such as the MDRT Annual Meeting and the MDRT Global Conference.
Finally, being an MDRT member teaches the concept of the whole person through the 7 pillars of MDRT, including relationships, health, education, career, ministry, finance, and spirituality.
MDRT Day Indonesia 2023 is a seminar introducing MDRT to insurance agents, insurance companies, and the Indonesian public.
MDRT is expected to set an excellent example for the insurance agent profession in Indonesia and encourage professionalism through competence development. The event also featured speakers from professional agents who have been members of MDRT for more than 10 years.
Pertamina Pension Fund Insurance, Pertalife Reveals the Company’s Business Conditions
PT Perta Life Insurance (PertaLife Insurance) acknowledges that the financial industry, including the life insurance sector, is experiencing tremendous pressure due to global economic uncertainty. This condition also impacted the premium income of life insurance companies managed by the Pertamina Pension Fund (71.39 percent).
“Business pressure comes from both a captive and non-captive market,” Yuzran Bustamar, PertaLife Insurance’s Director of Finance and Investment, told Bisnis on Monday (17 July 2023).
Yuzran explained that the non-captive market potential is currently very dynamic, while captive market conditions are more predictable. However, PertaLife Insurance is currently still in the process of data reconciliation, affecting bill issuance.
In the Corporate Retail Marketing segment, it is estimated that the most significant premium income will come from Credit Life Insurance (AJK) and annuity products, especially from Pension Funds. However, Yuzran stated that PertaLife Insurance has yet to be able to develop AJK’s business aggressively at this time because it still needs to negotiate with Reinsurance.
PertaLife Insurance’s premium income in the first quarter of 2023 decreased by 19.77 percent, reaching IDR 234.61 billion in March 2023, compared to IDR 292.41 billion achieved in the first quarter of 2022.
Despite the uncertainty, PertaLife Insurance targets premium income to reach IDR 1 trillion by the end of 2023. Yuzran stated that the company already has several strategies to achieve this target.
“One of the strategies that will be carried out is to change product composition and improve underwriting results,” said Yuzran.
In addition, PertaLife Insurance is committed to providing excellent service to increase customer loyalty and ensure policyholders feel comfortable paying premiums on time. This approach is expected to support the company’s sustainability transformation.
Another strategy involves synergy with PT Pertamina (Persero) Group and PT Timah Tbk Group. The focus is on product offerings and development, such as health products, Severance products, Term Life, and Credit Life Insurance.
Jasa Raharja Made a Profit of IDR 1.51 T in 2022. Investment and Assets are the Trigger
PT Jasa Raharja recorded a net profit of IDR 1.51 trillion during the 2022 financial year. This achievement was driven by the main contribution from investment management and optimization of the company’s assets.
The Main Director of Jasa Raharja, Rivan A. Purwantono, revealed that the company’s investment experienced a significant increase of 10.60% from IDR 13.8 trillion in 2021 to IDR 15.3 trillion in 2022. In addition, from a revenue perspective, Jasa Raharja recorded a positive growth of 6.94% from IDR 5.9 trillion in 2021 to IDR 6.4 trillion in 2022.
“This increase shows Jasa Raharja’s commitment to continuing to develop its investment portfolio and maximizing revenue to achieve profitable results for the company,” said Rivan in a written statement on Thursday (13 July 2023).
Regarding finance, Jasa Raharja also experienced a significant increase in its assets, from IDR 15 trillion in 2021 to IDR 16.5 trillion in 2022, an increase of 10.22%. The Solvency Ratio (RBC) percentage level has also increased, reaching 709.42% in 2022, up from 669.80% in 2021.
“This increase also shows a high level of trust from all parties in Jasa Raharja’s financial stability, which allows the company to grow sustainably,” he added.
Rivan emphasized that in facing the growing challenges in the insurance sector, Jasa Raharja remains committed to providing the best service to the community. The company will continue to apply prudent financial management and innovative investment strategies to ensure its existence in this industry.
This positive achievement, according to Rivan, is the result of the hard work of the entire Jasa Raharja team and solid collaboration with key partners, especially the National Police, Ministry of Home Affairs, Ministry of Transportation, Regional Government, and hospitals, both in terms of service, increasing income, and managing investment.
“We will continue to strive to improve the company’s performance going forward and provide the best service to all parties involved,” concluded Rivan.
BRI Life Pockets New Premium Income of IDR 1.72 Trillion in Semester I/2023
Bisnis.com, JAKARTA— PT Asuransi BRI Life recorded an annualized premium equivalent (APE) growth of 12 percent year on year (yoy) to IDR 1.72 trillion in semester I/2023.
The Main Director of BRI Life, Iwan Parsila, explained that this growth occurred because the company penetrated all segments according to the needs of each piece.
“We continue to focus on increasing the protection portfolio and reducing dependence on PAYDI products [Investment Linked Insurance Products], given the complexity of benefits, the potential for mis-selling, and stringent regulations for these products,” Iwan told Bisnis on Tuesday (18 July 2023).
Although he did not mention a definite target for new premium growth at the end of this year, Iwan emphasized that the company wants to continue to grow sustainably above the market average to increase market share.
In December 2022, BRI Life recorded APE growing by 28 percent on a yoy basis, reaching IDR 3.26 trillion. Meanwhile, gross premiums throughout 2022 reached IDR 8.78 trillion, growing 29 percent annually. During 2022, BRI Life has also paid claims and benefits to heirs and policyholders of IDR 5.05 trillion.
At the end of 2022, BRI Life’s total wealth was recorded at IDR 21.49 trillion, growing 18% yoy, with real investment wealth reaching IDR 17.01 trillion, growing 16% annually.
Meanwhile, total equity reached IDR 7.71 trillion, growing 15% yoy, with a Risk-Based Capital (RBC) position reaching 526%. This figure far exceeds the minimum level set by the OJK of 120 percent.
This information is presented by L&G Insurance Broker – The Smart Insurance Broker.
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