Liga Asuransi – The world of insurance is never devoid of dynamics and interesting news. Starting from the decision of the Constitutional Court which changed the insurance legal landscape in Indonesia, to the brilliant report on premium growth for the marine cargo business line by Tokio Marine Indonesia, everything became an important highlight at the beginning of this year. No less interesting, the tragedy involving Jeju Air airline once again emphasizes the vital role of aviation insurance in providing protection against major risks. This article thoroughly examines the latest developments in the insurance industry as well as the challenges and opportunities faced amidst global uncertainty in 2025. Get ready to dive into the issues that are currently being discussed!
MK Decision: Insurance Companies Can No Longer Cancel Unilateral Claims
The Constitutional Court (MK) has just made an important breakthrough in the world of insurance in Indonesia. On Friday (3/1), the Constitutional Court granted the request for judicial review of Article 251 of the Commercial Code (KUHD) submitted by Maribati Duha. This decision was recorded under case number 83/PUU-XXII/2024 and stated that the norm of Article 251 of the Criminal Code is now conditionally unconstitutional.
The ruling confirms that insurance companies no longer have the authority to cancel claims unilaterally. This article was previously the basis for applying the principle of Utmost Good Faith or maximum good faith in the relationship between insurance companies and customers.
Widespread Impact in the World of Insurance
According to Insurance Observer, Irvan Rahardjo, this decision has a significant impact. “With the abolition of Article 251 of the Criminal Code, insurance companies must be more professional and careful in implementing the principle of good faith. “The risk of dishonesty from customers must now be anticipated with a more careful approach,” said Irvan.
He added that insurance companies must now improve risk mitigation through a more comprehensive assessment process of customer history. In addition, the role of insurance agents must also be evaluated. “So far, agents have only been sales-oriented to pursue commissions without thinking too much about the risks that might occur,” he said.
New Challenges: Moral Risk and Fraud
Executive Director of the Indonesian Life Insurance Association (AAJI), Togar Pasaribu, said that the abolition of Article 251 of the Criminal Code could create new challenges. “The principle of good faith which has been the foundation of the relationship between insurance companies and customers has been disrupted. “In the end, the potential for moral risks and fraud cases could increase,” explained Togar.
Togar emphasized that insurance companies need to prepare more mature mitigation measures. This includes strengthening customer data systems, applying technology in risk analysis, as well as stricter supervision of the claims process.
The Importance of New Regulations
Chairman of the AAJI Management Board, Budi Tampubolon, highlighted the importance of the principle of Utmost Good Faith in the insurance business. “Absolute honesty is the main foundation of insurance. “With the abolition of Article 251, this industry needs replacement regulations so that there is no legal vacuum,” he stressed.
Irvan Rahardjo also supports this view, by suggesting collaboration between insurance companies, associations and the Financial Services Authority (OJK) to develop new regulations. These regulations must be able to maintain a balance between customer protection and company interests.
Momentum for Professionalization of the Insurance Industry
This Constitutional Court decision can be a momentum to increase professionalism in the insurance industry. Companies are required to be more transparent, accountable and detailed in every process, from policy issuance to claim settlement.
For customers, this decision is a breath of fresh air because it provides more protection for their rights. However, customers are also expected to remain honest and responsible in providing information.
With all its challenges, the Indonesian insurance world is now entering a new era full of dynamics. Collaboration between all parties is the key to creating a better and more trusted insurance ecosystem.
Tokio Marine Indonesia Records 11% Growth in Marine Cargo Business
PT Asuransi Tokio Marine Indonesia (Tokio Marine Indonesia) achieved brilliant performance in the marine cargo insurance business line throughout 2024. Until November 2024, premium income from this line reached IDR 640 billion, growing 11% compared to the same period in the previous year.
President Director of Tokio Marine Indonesia, Sancoyo Setiabudi, revealed that this growth was mainly driven by local businesses utilizing agent and broker channels. “Our income from the marine cargo insurance line showed a very good increase, in line with our strategy of focusing on the local commercial sector,” he said to Kontan, Friday (3/1).
Optimism amidst Global Dynamics
Even though the world of trade is facing various challenges, including the trade tariff policy that will be implemented by the President Elect of the United States, Donald Trump, Sancoyo is confident that the impact on the company’s marine cargo insurance business will be minimal.
“Given that the volume of import and export shipments to and from the US that we cover is relatively small, the impact will not be significant for us,” he explained.
Seeing this positive trend, Tokio Marine Indonesia is targeting double digit growth for the marine cargo business line in 2025. Sancoyo is optimistic that next year’s performance can exceed this year’s achievements.
Strategy for 2025
To maximize performance in 2025, Tokio Marine Indonesia will focus growth on the local commercial sector as the main motor. The company also continues to strengthen superior services, such as e-cargo, which makes it easier for customers to manage their insurance needs digitally.
“We have several main advantages in the commercial sector, one of which is the support of a strong global network with more than 250 claims settlement agents throughout the world. “This allows us to resolve claims efficiently, quickly and on time,” said Sancoyo.
Technology Based Services Are Key
Tokio Marine Indonesia also continues to innovate by utilizing technology to provide the best service to its customers. The e-cargo service is a concrete example of the company’s digital transformation, which allows customers to monitor and manage their policies more easily and transparently.
Bright Projections for Marine Cargo Insurance
With a mature strategy and focus on innovation, Tokio Marine Indonesia is optimistic that it can continue to be a leader in the marine cargo insurance business line. Service excellence and a solid global network are a strong foundation for the company to face challenges and take advantage of opportunities in 2025.
Tokio Marine Indonesia now not only aims to grow, but is also committed to providing the best protection for customers amidst the ever-changing dynamics of the world of global trade.
Examining the Aviation Insurance Coverage Behind the Jeju Air Accident
The tragic incident involving Jeju Air flight number 7C2216 on December 29 2024 at Muan International Airport, South Korea, highlights the important role of aviation insurance. This Boeing 737-800 aircraft experienced a serious accident during an emergency landing, causing 179 people to lose their lives and causing major damage to airport facilities.
This accident raises many questions about aviation insurance coverage, especially how insurance protects airlines, passengers and related parties.
Comprehensive Aviation Insurance Coverage
Aviation insurance practitioner, Arman Juffry, explains that aviation insurance protects more than just aircraft.
- Agreed Value of Aircraft:
The value of the aircraft is insured based on an initial agreement between the aircraft owner and the insurance company.
- Airport Fees:
Including the use of fire extinguishing foam, damage to facilities such as runways or fences, and the cost of cleaning up debris.
- Search and Rescue:
Insurance also covers the costs of searching for a lost aircraft, especially in the case of a major accident.
- Compensation for Passengers:
- Funeral and funeral costs (for cases in Indonesia).
- Ambulance for victims or remains to the area where the next of kin live.
- Compensation for the victim’s family.
- Investigation Cost:
Including disclosure of the cause of the accident and in-depth analysis in accordance with the provisions of AVN 76.
“All expenditure must be in accordance with fair and reasonable principles, not excessive,” stressed Arman.
Jeju Air Insurance Claim Details
The Jeju Air plane involved in the accident was insured by Samsung Fire & Marine Insurance, with reinsurance support from AXA XL. The total aircraft insurance value reached US$1.03 billion (around Rp. 16 trillion), which includes:
- Primary compensation limit: US$1 billion for deaths and injuries.
- Aircraft damage: US$36.51 million.
Korean financial authorities ensured that the five insurance companies involved, including Samsung Fire & Marine Insurance, provided fast and adequate compensation to the victims’ families.
Additionally, to make individual travel insurance claims easier, the Korean government established a one-stop service center in collaboration with the local Life and Health Insurance Association.
Chronology of the Jeju Air Accident
The accident occurred when the plane made an emergency landing without the front wheels after receiving a warning about a potential bird strike from the ground control center. Failure to lower the front wheels caused the plane to skid at high speed and hit a concrete embankment at the end of the runway, triggering a large explosion.
Learn from This Tragic Incident
The Jeju Air tragedy is a reminder of the importance of aviation insurance in providing comprehensive protection against major risks. For airlines, insurance is not just about mitigating financial losses but also ensuring adequate compensation for victims and their families.
Wide coverage covering physical damage, operational costs, and passenger rights, is the reason why aviation insurance has such a vital role in the aviation industry. In the midst of high risks, aviation insurance provides certainty in the face of uncertainty.
Insurance Industry Challenges and Opportunities in 2025 amidst Global Uncertainty
2025 is predicted to be a period full of dynamics for the insurance industry. A number of major challenges, ranging from global economic uncertainty, the impact of climate change, to increasingly fierce business competition, are ready to test the resilience of business actors in this sector.
Main Challenges for the Insurance Industry 2025
Insurance observer, Mike Rini, said that the biggest challenges facing the insurance industry this year include:
- Global Economic Uncertainty:
The unstable economic situation affects people’s purchasing power and investment in the insurance sector. “The uncertain global economy clearly has a big influence, especially on people’s interest in buying insurance products,” said Rini.
- Climate Change Risks:
Natural disasters that are becoming more frequent due to climate change are adding pressure to the insurance industry, especially related to the surge in disaster claims.
- Intense Competition:
With the increasing number of players in this industry, insurance companies must be able to digitally transform and offer innovative products to remain relevant in the market.
Opportunities that can be exploited
Behind the existing challenges, Rini also sees big opportunities that industry players can take advantage of:
- Increased Public Awareness:
Increasing public awareness about the importance of insurance opens up the potential to expand the customer base.
- Untapped Market:
There are still certain segments of society and sectors that have not yet maximized their use of insurance, providing opportunities for wider penetration.
- Technology Based Innovation:
Utilizing technology, such as digitizing the claims process and developing insurance products based on customer needs, is the key to attracting more users.
“Even though there are big challenges, this industry still has big opportunities, especially through product innovation and technological services,” said Rini.
Positive Development of the Insurance Industry
In the midst of these challenges, the insurance industry’s performance is still showing growth. Based on data from the Financial Services Authority (OJK), insurance industry assets reached IDR 1,133.58 trillion as of October 2024, growing 2.98% annually (year-on-year).
This growth indicates that the insurance industry remains a sector that is resilient in facing economic turmoil and global competition.
Transformation Towards the Future
To survive and develop amidst challenges, insurance companies are required to be more adaptive. Rini suggests that industry players focus on:
- Digitalization of processes, from marketing to claims.
- Product adjustments according to market needs.
- Increasing public education about the importance of insurance.
2025 is the right time for the insurance industry to transform and take advantage of opportunities amidst challenges. With the right strategy, this industry can continue to grow and provide real benefits to society.
Source : https://keuangan.kontan.co.id/news/ini-sejumlah-tantangan-dan-peluang-industri-asuransi-pada-2025
AAJI predicts medical inflation will continue to increase, what will be the impact on life insurance?
The life insurance industry in Indonesia faces major challenges in 2025. One of the main issues is the surge in medical inflation which has a significant impact on health insurance claims. This was conveyed by the Executive Director of the Indonesian Life Insurance Association (AAJI), Togar Pasaribu, who highlighted this trend as a serious concern for the industry.
Spike in Claims Due to Medical Inflation
AAJI data shows that health insurance claims in the third quarter of 2024 reached IDR 20.91 trillion, an increase of 37.2% compared to the same period in the previous year of IDR 15.24 trillion.
“This high claim value is triggered by inflation in medical costs which continues to increase and is predicted to continue in the future,” said Togar.
This spike shows a consistent trend over the last three years, where the ratio of health claims has increased drastically:
- Quarter III-2022: 95%
- Quarter III-2023: 122.2%
- Quarter III-2024: 139.5%
Togar also mentioned that medical inflation could force insurance companies to adjust premiums so that they are still able to provide optimal protection for policyholders.
Collaboration with the Health Sector
To overcome this challenge, AAJI together with the Financial Services Authority (OJK) continue to discuss with related parties, such as the Ministry of Health and health service providers, to find solutions that create balance between the insurance industry and the health sector.
“Cross-sector cooperation is needed to control inflation in medical costs, so that pressure on insurance companies can be minimized without reducing the quality of service to policyholders,” explained Togar.
Optimism amidst Challenges
Despite facing pressure due to medical inflation, Togar expressed optimism that the life insurance industry will continue to grow positively in 2025. Public awareness of the importance of insurance protection is one of the main drivers of this growth.
“With the right strategy, the life insurance industry is able to adapt, especially through product and service innovation that suits people’s needs,” he said.
Expected Solution
To maintain a balance between claims and premiums, AAJI proposes several steps:
- Digitalization of Health Insurance: Leveraging technology to improve claims and administration efficiency.
- Collaboration with Health Facilities: Keep medical costs under control through strategic partnerships.
- Regulatory Improvement: Creating policies that support the stability of the health insurance industry.
It is hoped that the life insurance industry in Indonesia will be able to overcome the challenges of medical inflation well, while maintaining public confidence in insurance protection. 2025 will be an important momentum to strengthen industrial foundations through innovation, collaboration and digital transformation.
The government continues to apply the zero percent VAT facility for life, casualty and reinsurance insurance
The Indonesian government confirmed that a number of goods and services will still receive a zero percent Value Added Tax (VAT) facility, including the insurance sector. According to Minister of Finance Sri Mulyani Indrawati, this policy aims to support people’s purchasing power and other important sectors.
VAT exemption for essential goods and services
The zero percent VAT facility does not only apply to basic needs, but also covers crucial sectors such as health services, education and the financial services sector. Among the goods excluded from VAT are staple foods such as rice, corn, soybeans, fruit, as well as sugar and livestock. This shows the government’s commitment to maintaining price stability for basic goods that are really needed by the community.
The public transportation services sector also gets a zero percent VAT facility, which includes train tickets, plane tickets, as well as river and crossing transportation. Not only that, educational services from government and private institutions, including textbooks and holy books, are also VAT free.
Insurance and Financial Services Subject to Zero Percent VAT
Sri Mulyani also emphasized that the zero percent VAT facility covers the financial services sector, which includes financing, credit cards, pension funds, and insurance. Thus, life insurance, casualty insurance and reinsurance are still not subject to VAT, providing benefits for policy holders who prefer insurance protection.
This is considered important for the financial services sector, especially insurance, which is one of the pillars of financial protection for Indonesian people. With this policy, it is hoped that more people will take advantage of insurance services without being burdened by additional costs from VAT.
VAT Policy for Luxury Goods
Meanwhile, for luxury goods, the government continues to apply a VAT rate of 12 percent. The types of goods subject to this tariff include private planes, cruise ships, yachts and luxury motor vehicles. This regulation is regulated in Minister of Finance Regulation (PMK) Number 15 of 2023, which ensures that goods with prices above IDR 30 billion will be subject to higher taxes.
With this policy, the government hopes to balance protection for the community with tax collection on luxury goods that does not affect basic needs or other important sectors.
Conclusion
The zero percent VAT policy, which remains in effect for life insurance, casualty insurance and reinsurance, is seen as a step that supports economic stability and social protection for the Indonesian people. Other sectors such as health, education and public transport also benefit similarly, ensuring easier and more affordable access for the public. Despite this, luxury goods are still subject to higher tax rates, as part of the government’s fiscal policy.
OJK Implements New Rules, Insurance Companies and Fintech Lending Must Report SLIK
The Financial Services Authority (OJK) recently issued the latest regulations expanding the scope of reporting in the Financial Information Services (SLIK) system. This regulation, which is contained in Financial Services Authority Regulation Number 11 of 2024, aims to strengthen and develop the financial services sector and financial market infrastructure in Indonesia.
This new regulation requires insurance companies, including insurance companies that market credit insurance and/or suretyship products, as well as fintech lending or information technology-based funding services, to report debtor data into the SLIK system. With this addition, more companies are required to report data to SLIK, including five new types of companies that were not previously involved.
Five Types of New Companies that are Required to Report to SLIK
According to the Head of the OJK Literacy, Financial Inclusion and Communications Department, Aman Santosa, this regulation introduces five types of companies that are now required to report debtor data via SLIK. The five companies are:
- Insurance companies that market credit insurance and/or suretyship products.
- Sharia insurance company that markets sharia financing insurance products and/or sharia suretyship.
- Guarantee company.
- Sharia guarantee company.
- Organizer of information technology-based joint funding services (LPBBTI), such as fintech peer-to-peer (P2P) lending.
SLIK Reporting Deadline
It is important to note that these companies are required to become SLIK reporters no later than one year after this OJK Regulation is promulgated. Previously, parties who were required to report debtor data via SLIK only involved financial institutions such as banks, financing institutions and securities companies.
The Importance of More Comprehensive SLIK Reporting
The addition of parties who are required to report debtor data via SLIK will improve the quality of information related to debtors. This will certainly provide a more comprehensive picture of a more complete credit or financing profile, as well as increase accuracy in managing credit risk, insurance risk or guarantee risk.
Aman Santosa emphasized that this change not only provides benefits for the financial services industry in risk management, but also supports the smooth running of business activities in financial services institutions (LJK). With wider and more accurate access to information, financial institutions can be more efficient in managing and mitigating risks associated with providing financing and insurance facilities.
Support for Risk Management in the Financial Industry
In addition, a more comprehensive SLIK system will help financial industry players carry out better risk management in terms of credit and financing. This is the key to maintaining the stability of the financial services industry and supporting sustainable national economic growth.
With the implementation of this new regulation, it is hoped that the Indonesian financial sector will become more transparent and can provide more protection for consumers and minimize the risks faced by financial institutions. As a result, the financial industry in Indonesia can move more dynamically and be responsive to market needs.
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