Liga Asuransi – Dear Readers how are you? As usual, we are again presenting selected information about the world of insurance in the country. This week there has been much of the latest information from the insurance world. For that, we always present it to loyal readers.
We hope this information can sharpen your insurance knowledge and is functional. If you are interested in this news, please share it with your colleagues, so they understand like you.
Harvest Season Threatened to Fail, Sri Mulyani Urges Farmers to Take Agricultural Insurance
KONTAN.CO.ID – JAKARTA. Minister of Finance Sri Mulyani Indrawati suggested that farmers register for agricultural insurance as a solution so they don’t suffer losses when crop failure occurs.
According to her, this insurance is essential because rainfall has continued to increase since the end of last February, rainfall has continued to increase, which has caused flooding in the rice fields and ultimately leading to crop failure.
“I hope that, like now, when farmers start harvesting, and there is a flood, they will get compensation if the farming community has insured the plants, goods that are part of their income,” said Sri Mulyani at the National Coordination Meeting for Disaster Management 2023, Thursday (2/3).
He explained, Sri Mulyani said, through insurance with a financing design mechanism before the flood disaster occurred. Later when the rice fields and farmers’ fields are flooded, and the harvest fails, the farmers will get compensation.
The government has also implemented a pooling fund mechanism for state-owned goods. For example, when an earthquake occurs in Papua, you can immediately find out the level of damage to a building and estimate whether the insurance can pay for the repair of the damaged building.
Previously, the Central Statistics Agency (BPS) stated that the primary harvest season from the end of February to March 2023 is in danger of failing because rainfall continues to occur in some areas of Indonesia, triggering flooding.
Pudji Ismartini, Deputy for Distribution and Services Statistics at the Central Statistics Agency (BPS), said, based on BMKG data, extreme weather occurred in most parts of Indonesia with high rainfall exceeding 50 mm per day (heavy rain) in the last week of February 2023.
“The last week of February, we enter the harvest season and will last until March, but at the same time, rainfall is still high in most parts of Indonesia,” said Pudji when delivering the BPS release Wednesday (1/3).
According to her, based on experience, extreme weather, such as rain, can affect the harvest season. This happened because the rice fields were submerged in rainwater, so farmers could not harvest their fields because of the flooding.
BPS also noted that floods occurred in several areas of Indonesia, eventually dampening rice fields, such as in Mojokerto, Bontang, Sumbawa, Bontang, and several other sites.
General Insurance Premiums Translucent IDR 90.12 Trillion in 2022, AAUI Says There are Two Ballast Sectors
Bisnis.com, JAKARTA — The Indonesian General Insurance Association (AAUI) stated that premium income in the general insurance industry has increased by 15.3 percent annually (year-on-year/yoy) throughout 2022.
Its value rose to IDR 90.1 trillion. Deputy Chairperson of AAUI for Statistics & Research Sector Trinita Situmeang said that premiums recorded in the general insurance industry increased compared to last year, reaching IDR 78.14 trillion. This means that the dividend has risen by IDR 11.97 trillion.
“Most of the business lines recorded positive growth, and only two general insurance business lines posted negative growth in the fourth quarter of 2022,” Trinita said in a Press Conference on General Insurance Industry Data for the fourth quarter of 2022 in Jakarta, Tuesday (28/2/2023 ).
Trinita detailed that property insurance premiums are the mainstay of growth in general insurance premiums. If you look at it, premiums on property insurance increased by 17.3 percent yoy, from IDR 22.36 trillion to IDR 26.23 trillion. This means that this line of business grew by IDR 3.87 trillion.
Furthermore, premiums in the motor vehicle business line were also observed to increase by 15.7 percent yoy. Its value increased from IDR 15.68 trillion to 18.14 trillion in the fourth quarter of 2022. Followed by satellite premiums which rose to 1,107.3 percent yoy. This acquisition increased from IDR 91 billion to IDR 1.09 trillion, or an increase of IDR 1 trillion in the fourth quarter of 2022.
In addition, credit insurance premiums have also increased by recording single digit growth in 2022. Trinita said this line of business rose 4.5 percent yoy to IDR 14.29 trillion from the same period last year of IDR 13.68 trillion.
“Premiums recorded by credit insurance will relatively increase in single digits in 2022,” he said. On the other hand, continued Trinita, the business lines that experienced negative growth were onshore energy insurance and suretyship insurance. Both experienced contractions of -1.1 percent yoy and -13.0 percent yoy in the fourth quarter of 2022.
Trinita explained that suretyship insurance was observed to have fallen the most in 2022, from IDR 1.57 trillion to IDR 1.36 trillion. Meanwhile, onshore energy insurance premiums fell from IDR 229 billion to IDR 226 billion.
Claims Translucent IDR 12.61 Trillion, AAUI: Credit Insurance Must Improve
Bisnis.com, JAKARTA — The Indonesian General Insurance Association (AAUI) stated that banking and insurance, especially credit insurance, are interdependent.
The Head of the Statistics Department of AAUI, Esti Handayani, assessed that even though the two have mutual dependence, the insurance industry should improve because there is a risk of credit insurance itself.
“But the insurance industry itself should also improve, meaning that there are risks, and insurance transfers risks,” said Esti in his performance presentation on AAUI Quarter IV/2022, quoted on Thursday (2/3/2023).
In other words, continued Esti, a portion of the premium must be paid and collected by the insurance company to support claim payments.
However, if the premium is insufficient to pay for claims and the insurance collapses, insurance and banks will fall, harming the economy. Therefore, both of them must improve themselves.
“But insurance cannot stand idly by when the bleeding gets worse because in the end, this problem [credit insurance claims] has to be resolved,” he said.
Apart from relying on tariffs, Esti believes that insurance must also have a sound backup system and adequate premium calculations. It’s the same with reinsurance.
In addition, Deputy Chairperson of AAUI for Statistics & Research, Trinita Situmeang, said that the credit insurance ecosystem must be strengthened and must be able to withstand risks to meet current and future needs.
“What is called dependency is that which is hung must be strong because that is the principle and the key. So that it is necessary to strengthen the entire credit insurance ecosystem from front to back,” said Trinita.
Trinita said this could be done by transferring risks with good calculations, as well as adequate rates and based on risk management principles.
“AAUI sees this through the lens that all of these must be healthy and fit to ride credit insurance,” he said.
In addition, AAUI also assesses the need to analyze the strength of capital from insurance and reinsurance companies.
Throughout 2022, claims paid for credit insurance will increase by 65.3 percent annually (year-on-year/yoy). Increase from IDR 7.63 trillion to IDR 12.61 trillion due to the increasing situation of the Covid-19 pandemic in the last three years.
Meanwhile, premiums recorded in the credit insurance business line were also observed to increase by 4.5 percent yoy to IDR 14.29 trillion from the initial value of IDR 13.68 trillion.
Based on research entitled “Banking and Insurance Relations: Structural or Temporal Phenomena,” published by the Indonesia Financial Group (IFG) on 16 January 2023, it was found that the insurance and banking industries have high interrelationships and dependencies.
Head of IFG-Progress Reza Yamora Siregar said these findings show a stronger integration relationship, especially between banking and insurance, primarily through the credit insurance relationship, reducing the risk of bank credit failure.
“These findings indicate that there is a potential risk of the large dependence of banks on insurance, one of which is supported by the large portion of credit insurance, as well as stronger integration between the insurance and banking sectors,” as quoted from research on Thursday (2/3/2023).
IFG stated that credit insurance as a bridge between the banking and insurance finance industry requires a solid regulatory framework and increased supervision. Especially in the last five years, the performance of the credit insurance business has seen a downward trend.
AAUI Forms a Special Team to Prepare Electric Vehicle Insurance
KONTAN.CO.ID – JAKARTA. The Indonesian General Insurance Association (AAUI) is reviewing insurance for Battery-Based Electric Motorized Vehicles (KBLBB), known as electric vehicles.
AAUI also formed a Working Team to prepare special insurance for these environmentally friendly vehicles. This is because electric vehicles have a slightly different risk from conventional vehicles.
How to cover and also the price must be explicitly considered. Currently, electric vehicle insurance is still included in general motorized vehicles. The development of the electric vehicle ecosystem that the Government is intensifying also impacts the insurance industry.
AAUI Executive Director Bern Dwyanto said it takes time to develop electric vehicle insurance because it needs to be studied in more depth.
Where continued Bern, the risk will be quite different from conventional vehicles, so insurance companies must be even more careful in how to cover it, determine the pricing, and manage the risk, which must be considered more specifically.
“That to support the electric vehicle program, AAUI considers it necessary to conduct a study of KBLBB risks considering this is a new type of risk,” said Bern when contacted by KONTAN, recently.
In January 2023, AAUI responded by forming a Working Team for this acceleration, whose duties include conducting studies on applying KBLBB insurance products overseas.
Second, hold discussions or FGDs with related parties, including regulators, Brand Sole Agents (ATPM), and repair shops. Finally, the Working Team is also tasked with compiling KBLBB insurance reviews, including terms & conditions, which include wording, premium rates, and deductibles4, and conducting socialization with AAUI members on the studies that have been prepared.
Later, there will be a separation between recording electric vehicle insurance premiums and conventional ones. Bern said, AAUI supports the Government’s current program in launching the Battery-Based Electric Motorized Vehicle Acceleration Program (KBLBB) towards environmentally friendly and sustainable development.
AAUI sees an opportunity to develop electric vehicle insurance in line with the government’s efforts to encourage electric vehicles. Bern also believes that the motor vehicle insurance business line is predicted to remain one of the main contributors to the general insurance industry’s premiums.
Furthermore, he is optimistic that this line of business can grow positively this year, in line with the start of the automotive industry, both conventional and battery-based vehicles, which are increasingly busy in production and demand.
From an industry perspective, Simas Insurtech Chief Executive Officer Teguh Aria Djana said the opportunity for electric vehicle insurance is huge in the next two to three years when many well-known brands are competing to make electric car variants.
We are preparing an electrical vehicle insurance product,” Teguh said when contacted by Kontan. Teguh added. There are still many business actors who wait and see because the preparation of electric car infrastructure is also being accelerated.
President Director of Aswata, Christian Wirawan Wanandi, also considers the opportunity for the electric vehicle insurance business line to be perfect going forward. Motor vehicle insurance business opportunities will be even better with electric vehicle insurance.
Source: https://newssetup.kontan.co.id/news/aaui-bentuk-tim-khusus-untuk-siapkan-asuransi-kendaraan-listrik.
This information is presented by L&G Insurance Broker – The Smart Insurance Broker.
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