5 Selected Indonesian Insurance News September 2022

Liga Asuransi – Dear readers, how are you? See you again in the 5th edition of selected insurance news in September 2022. 

Many things have happened in the insurance world this month. Here we write 5 selected news about insurance for you. If you are interested in this article, please share it with your friends so that they also understand like you.

1. Property Insurance Claims Soared, Reached Rp. 3.99 Trillion

Bisnis.com, JAKARTA – The Indonesian General Insurance Association (AAUI) reported that property insurance was one of the business lines with a significant increase in claims until the second quarter of 2022. 

AAUI noted that claims paid by property insurance up to the second quarter of 2022 broke Rp3.99 trillion, up 42 percent yoy compared to the same period last year. Although individual businesses jumped sharply, overall this increase only contributed to the claims ratio of 26.7 percent.  

“The ratio of property claims is still in a fairly stable range compared to the same period last year despite an increase of one percent,” said AAUI Deputy Head of Statistics, Research & Analysis Trinita Situmeang, quoted Friday (23/9/2022).

When property insurance claims increased, AAUI also noted that property insurance premiums grew significantly to Rp14.96 trillion. An increase compared to the same period last year which reached Rp10.97 trillion.

At the same time, said Trinita, her party is aware of the slowing demand for four-wheeled motorized vehicles. He said that so far, dealers and warehouse managers for four-wheeled vehicles have become one of the sources of income in the property insurance business.

The retail sales rate of four-wheeled motor vehicles is slower than the production rate, resulting in more products being stored in warehouses and showrooms, increasing business risk.

“Of course, this gap between production and retail sales also creates a potential risk that is part of insurance to support it, in terms of property insurance or for storage while in the warehouse or showroom until waiting to be sold,” said Trinita. 

In his presentation which refers to data from Gaikindo and AISI, the production of four-wheeled vehicles until the second quarter of 2022 reached 658,285 units or grew by 28 percent year-on-year (yoy). Meanwhile, retail sales of four-wheeled vehicles reached 465,252 units per quarter II/2022 or grew by 20 percent.

Sources : https://finansial.bisnis.com/read/20220923/215/1580265/klaim-asuransi-properti-melonjak-tembus-rp399-triliun

1. Bjorka Hackers Excited, Beware of Potential Data Leaks in the Insurance Industry

Liputan6.com, Jakarta The Financial Services Authority (OJK) warned of the dangers of data leakage in the non-bank financial industry (IKNB), including the insurance industry. Following the phenomenon of personal data being leaked in recent times, especially related to the hacking of Bjorka hackers.

The Chief Executive of the OJK Non-Bank Financial Industry Supervisor (IKNB), Ogi Prastomiyono, revealed the potential for cyber attacks to the insurance industry. This is in line with the development of increasingly sophisticated technology.

“Even large companies have the potential for this to happen. We anticipate insurance and so on, for IKNB not to occur in the IKNB industry,” he said at a press conference at the OJK Building, Wisma Mulia 2, Jakarta, Tuesday (13/9/2022). ).

According to him, the issue of data protection is a serious article. Especially with the database of state institutions which was later found to have been hacked by hackers.

Thus, he reminded industries that are under the supervision of the OJK to be careful.

“Indeed the security issue is a concern. Of course we will also convey to the non-bank financial services industry that we supervise,” he said.

Separately, the National Cyber ​​and Crypto Agency (BSSN) admits that the technology and information security system in Indonesia is still not strong enough.

According to the Head of BSSN Hinsa Siburian, this is in line with the Indonesian people who have just started to use technology massively during the Covid-19 pandemic.

“We must not immediately assume that we are strong, because we know that there are many vulnerabilities. The government is of course aware. All of us, the entire Indonesian nation, are aware that we have only just entered. the real paradigm,” he said at the BSSN Office, Sawangan, Depok, Tuesday (13/9/2022).

However, Hinsa said that his party was accelerating cyber security. Although in every technological development there is always something new so that it becomes a gap for someone to commit a technological crime.

“BSSN pursues mainly security issues. So indeed we hope that the development of the use of information and communication technology is parallel, and parallel to the threats that will arise,” explained Hinca.

Source : 

https://www.liputan6.com/bisnis/read/5069041/heboh-hacker-bjorka-awas-potensi-kebocoran-data-di-industri-insurance 

1. AAUI Talks about the Potential of Working on Electric Vehicle Insurance

Bisnis.com, JAKARTA – The Indonesian General Insurance Association (AAUI) assesses that the development of electric motor vehicles in Indonesia is an opportunity for the general insurance industry. 

Deputy Chairperson of AAUI for Engineering 3 Delil Khairat said insurance for the electric vehicle segment really needs to be observed in the future as the government continues to encourage the development of environmentally friendly vehicles.

“The government has also announced that Indonesia can become an important player in the battery supply chain for electric vehicles. From the insurance side, we need to be optimistic about this opportunity,” said Delil, Wednesday (21/9/2022). 

However, continued Delil, these opportunities also need to be considered carefully. This is because the risks of electric vehicles are certainly different from the risks of conventional motorized vehicles.

“Electric vehicles carry risks that are different from conventional ones, so the way we cover [provide protection] and pricing [premiums] needs to be considered more specifically,” he said.

Meanwhile, the general insurance industry’s premium income is supported by one of the motor vehicle insurance business lines. As of the second quarter of 2022, motor vehicle insurance is still the second largest contributor with a contribution reaching 19 percent of the total premium recorded by general insurance.

Premiums recorded for motor vehicle insurance reached Rp 8.7 trillion during the first semester of 2022 or grew 18.3 percent year-on-year. 

Deputy Head of Statistics, Research & Analysis AAUI Trinita Situmeang said, until now there has been no separate recording of insurance premiums for conventional motorized vehicles and electric vehicles. 

“It is hoped that with the passage of time and the readiness of the industry to provide better statistics, we can capture the profile of electric vehicle insurance,” he said.

Sources : https://finansial.bisnis.com/read/20220922/215/1580026/aaui- talk-potensi-garap-asuransi-kendaraan-listrik 

1. When Credit Insurance is ‘Only’ to Polish Banking NPL Performance 

Bisnis.com, JAKARTA – The deteriorating profitability of insurance companies that play in the credit insurance business line is a reflection of the players’ low bargaining power against banking interests. Credit insurance plays a role in polishing the performance of non-performing loans (NPLs).

Senior Research Associate IFG Progress Ibrahim Kholilul Rohman revealed that this credit insurance phenomenon is also reflected in the trend in the number of claims which always goes hand in hand with the level of bank loan-at-risk for the past 5 years. 

“In general, the bargaining power of insurance companies is low. Moreover, specifically for credit insurance, when a bank asks for help, it is unlikely that [insurance] players will refuse, even though later they will face a high loss ratio,” he said in a limited discussion with the media, quoted on Thursday. (22/9/2022). 

Meanwhile, this research institute created by Holding BUMN Insurance and Guarantee Indonesia Financial Group (IFG) has actually revealed phenomena and issues related to credit insurance in a study that was launched in mid-2022. 

One of these research entitled ‘Credit Insurance: Perspectives Amidst Challenges’ reveals that the low bargaining power of the players is the result of ties to the same controller or owner with several banking entities, or being in the same financial conglomerate as a bank.

“This causes dependence and finally brings a mindset, which is important to get a premium with all the risks, rather than not getting a premium at all. This then also makes players tend to have no other answer but to take the risk,” added Ibrahim. 

Research Associate IFG Progress Nada Serpina added that the encouragement of banking interests has also made credit insurance in Indonesia still one of the drivers of the general insurance industry, after the property insurance and motor vehicle insurance business lines.

“So the big role of credit insurance in the industry is also driven by the interests of lending banks that are related to assignments from the government, or to back-up banks in the same financial conglomerate as the players concerned,” he said.

As an illustration, the portion of credit insurance market share to the general insurance industry reached 15.5 percent. In fact, in almost all developed countries, the portion of credit insurance is very low, for example, the United States is only 0.3 percent, Germany is 2.4 percent, France is 2 percent, Japan is 0.4 percent, China is 1.5 percent, and Singapore is 5.2. percent.

Meanwhile, Research Associate IFG Progress Yuridunis Saidah admitted that the high loss ratio of the credit insurance business in Indonesia has made several reinsurance companies reduce their share of risk with general insurance companies that play in this business line. 

In the future, IFG Progress assesses that the credit insurance industry needs to improve in several aspects, especially to improve the loss ratio and deal with the continuing trend of deteriorating company profitability due to this line of business. 

Several inputs, including starting to go deeper into considering aspects of banking loan underwriting, as well as strengthening efforts to suppress the phenomenon of asymmetric information, in order to prevent fraud and moral hazard.

In addition, if the credit insurance product has the characteristics of a long-term single premium, it is necessary to have special provisions that take into account economic conditions within a certain period of time.

Sources : https://finansial.bisnis.com/read/20220922/215/1580338/kala-asuransi-credit-cuma-jadi-pemoles-kinerja-npl-perbankan 

1. OJK Calls Public Complaints about Insurance the Most

Jakarta, CNN Indonesia – The Financial Services Authority (OJK) says the insurance sector is the business line in the non-bank financial industry that receives the most complaints from the public.

The Chief Executive of the OJK Non-Bank Financial Industry Supervisor (IKNB), Ogi Prastomiyono, said that one of the public complaints was insurance products, namely unit links.

In addition, OJK also often gets complaints from policyholders of several insurance companies. Some examples are Jiwasraya, AJB Bumiputera 1912, Kresna Life, and WanaArtha Life.

“When it comes to complaints to IKNB regarding insurance products, most of them are unit links and policy holders, especially at Jiwasraya, then Bumiputera, then Kresna Life and WanaArtha Life,” Ogi said at a press conference at Wisma Mulia 2, Tuesday. (13/9).

The majority of policyholders, continued Ogi, asked for clarity regarding the payment of claims from insurance companies. Of these complaints, some have been processed by the OJK through communication with the company concerned.

Ogi explained that his party will immediately conduct research on all public complaints against the financial services industry. After that, the OJK will summon the company that the policyholder has complained about.

“For example, selling unit-linked products, we asked about the problem, how come it was not resolved,” he said.

According to Ogi, there are three stages that will be carried out by OJK in handling public complaints. Starting from problem research, summoning companies, to court proceedings.

“If in some processes the complaint still does not resolve the problem, then we will direct it to the court process,” concluded Ogi.

Source: 

https://www.cnnindonesia.com/economy/20220913204148-78-847417/ojk-sebut-aduan-dunia-dunia-asuransi-most-most 

This information is presented by L&G Insurance Broker – The Smart Insurance Broker 

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