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7 Latest News on the Indonesian Insurance Industry: And the New Tapera Regulations that Impact Life Insurance Premium Income

Liga Asuransi – Hello risk takers, we are back to discussing developments and events in the world of insurance in Indonesia in the last week, because as we all know, the object of insurance is not only vehicles, life, health or property, but there is still a very wide range of objects that can be insured. , especially in the business sector. Almost all business processes from A to Z can be protected by insurance. In this edition, as usual, we have again collected 7 selected news related to insurance that are good for you to know. Also included are things that are currently hot lately regarding Tapera.

As always, if you are interested in this article, please share it with your colleagues so they can understand it as well as you.

Maximus Insurance Records Gross Premium Growth of 8.38% in 2023, Achieves Operating Profit of IDR 13.5 Billion 

PT Asuransi Maximus Graha Persada Tbk (ASMI), known as Maximus Insurance, showed impressive financial performance in 2023. The company’s gross premiums grew 8.38 percent to IDR 1.87 trillion, up from IDR 1.7 trillion in 2022.

Maximus Insurance Corporate Secretary, Norvin Osel, revealed that this increase was also reflected in an increase in net claims of 8.05 percent to IDR 143 billion, as well as underwriting expenses which rose 11.1 percent to IDR 249 billion. Despite this, the company’s underwriting results actually shot up 15.9 percent to IDR 132 billion in 2023. This achievement was strengthened by investment results which reached IDR 11.25 billion, reversing from a loss of IDR 96.7 billion in the previous year.

“In line with this, the company recorded an operating profit of IDR 13.5 billion in 2023, compared to the previous year with an operating loss of IDR 91.6 billion,” said Norvin in his statement on Thursday, May 30 2024.

Norvin added that Maximus Insurance also managed to achieve comprehensive income of IDR 8.49 billion, in contrast to a loss of IDR 85.9 billion in the previous year. Facing 2024, this company has prepared four main strategic plans.

First, preparations for the implementation of PSAK 117 in 2025. For this, Maximus Insurance has developed three main steps: portfolio and production risk management, development of a comprehensive information system, and improving the quality of human resources through intensive training programs.

“Three other strategic plans are updating the company website, signing a cooperation agreement with BPR Semarang, and signing a cooperation agreement with Qoala Plus, an insurance technology company,” he added.

For information, Maximus Insurance operates in the field of loss insurance, including vehicle, property, transportation, heavy equipment, personal accident and health insurance. This company has support from a number of well-known reinsurers such as PT Reinsurance Nusantara Makmur, PT Reinsurance Indonesia Utama, PT Tugu Reinsurance Indonesia, PT Indoperkasa Success Reinsurance, PT Airline Reinsurance Indonesia, and PT Reinsurance Indonesia Utama Syariah. Maximus Insurance also operates in several cities in Sumatra, Java, Kalimantan and Bali.

With solid achievements and strategic plans, Maximus Insurance is optimistic about facing 2024 and continues to be committed to providing the best service for its customers.

 

Source : https://www.viva.co.id/bisnis/1718647-sempat-merugi-di-2022-emiten-asuransi-ini-sukses-cetak-laba-rp-13-5-miliar-di-2023?page=2 

 

Tokio Marine Clarifies Insurance Coverage for Electric Cars That Catch Fire

Recently, the issue of the inability of insurance to cover losses due to electric car fires has been widely circulated in the community. Hadi Sutopo, Head of Tokio Marine’s Vehicle Business Department, provided an explanation to clarify understanding regarding insurance responsibilities for electric cars that catch fire.

In his interview with Beritasatu.com on Monday (27/5/2024), Hadi emphasized that there are several conditions that influence insurance decisions in covering electric car fire losses.

“You must first understand how the electric car caught fire. From there, insurance will assess whether the loss can be covered or not,” he explained.

Hadi said that an electric car that catches fire as a result of an incident, such as a collision, can still be covered by insurance. If an electric car has an accident that causes a fire, insurance will cover the loss.

However, the situation is different if the electric car catches fire for no apparent reason. For example, an electric car suddenly catches fire while being parked or while recharging the battery without any external factors triggering the fire.

“Conditions like that are not covered by insurance,” stressed Hadi.

Hadi also added that current electric car technology is very sophisticated, so the possibility of a spontaneous fire is very small. To date, there have been no recorded cases of electric cars catching fire in Indonesia.

With this explanation, it is hoped that the public can better understand insurance policies related to electric cars and not be influenced by issues that are not necessarily true. Tokio Marine remains committed to providing maximum protection to its customers, including electric car owners, in accordance with applicable regulations.

This issue arises amidst the increasing popularity of electric cars in Indonesia, which is driven by efforts by the government and various parties to reduce carbon emissions and increase the use of renewable energy. With more and more electric car owners, a clear understanding of insurance coverage is becoming increasingly important.

Source : https://www.beritasatu.com/ototekno/2819634/mobil-listrik-terbakar-tidak-ditanggung-asuransi-ini-faktanya 

 

Life Insurance Health Claims Soar 29.6% in Q1 2024, AAJI Takes Strategic Steps

The Indonesian Life Insurance Association (AAJI) reported a significant spike in life insurance health claims in the January-March 2024 period, with an increase of 29.6% on an annual basis (year on year/yoy) to IDR 5.96 trillion. In the same period the previous year, health claims paid by the life insurance industry reached IDR 4.6 trillion.

AAJI’s Head of Product, Risk Management and GCG, Fauzi Arfan, revealed this data at a press conference in Jakarta on Wednesday (29/5/2024). “Health insurance claims experienced a fairly high increase, namely 29.4% with a total value of IDR 5.96 trillion,” he said.

However, this increase in health claims is inversely proportional to the total claims paid by the life insurance industry as a whole, which actually decreased. In the January-March 2024 period, the life insurance industry paid claims amounting to IDR 42.93 trillion, down 5.8% yoy compared to the same period in 2023 which reached IDR 45.59 trillion. Fauzi explained that the decrease in total claims was mainly due to the decrease in payments for death claims, redemption value (surrender) and other claims.

In detail, death claims fell 10.7% yoy to IDR 2.58 trillion from IDR 2.89 trillion in the first quarter of 2023. Surrender claims experienced a sharper decline of 22.4% yoy to IDR 20.80 trillion from the previous IDR 26.80 trillion in the first quarter of 2023.

The largest portion of health insurance claims came from individual products, with total claims reaching IDR 3.89 trillion, an increase of 34% yoy compared to IDR 2.9 trillion in the first quarter of 2023. Group health insurance claims also rose 21% yoy to IDR 2.07 trillion from IDR 1.7 trillion previously.

Overcoming the trend of increasing health claims, AAJI took several strategic steps. Fauzi revealed that AAJI reviews cooperation with hospitals, evaluates products and premiums based on claims experience, and facilitates discussions between AAJI member companies.

The life insurance industry also supports the steps taken by the Financial Services Authority (OJK) which has signed a Memorandum of Understanding (MoU) with the Ministry of Health (Kemenkes) to strengthen the health ecosystem through quality health insurance products and services. In line with this, AAJI is reviewing the establishment of methods for exchanging information between member companies to create a more transparent, accountable and efficient health sector.

“In response to OJK’s hopes for transparency in the health insurance sector and other insurance products, AAJI is studying the establishment of a data center while still prioritizing customer data security. “We hope that this data center can minimize the occurrence of fraud and simplify the underwriting process in insurance companies,” said Fauzi.

With these strategic steps, it is hoped that the life insurance industry can continue to develop and provide better services for its customers, as well as making a positive contribution to the health ecosystem in Indonesia.

Source : https://finansial.bisnis.com/read/20240529/215/1769419/klaim-asuransi-kesehatan-tembus-rp596-triliun-per-kuartal-i2024 

 

Life Insurance Protection against Suicide Cases: Conditions and Exclusions

There are still many people who do not know whether suicide can be covered by life insurance protection. In general, life insurance is designed to protect or cover the risk of death for the policy holder. However, what about suicide cases?

Chairman of the Indonesian Life Insurance Association (AAJI) Management Board, Budi Tampubolon, explained that suicides are generally not covered by life insurance policies. “Generally it is not covered, the most standard is that suicide is not covered. That is the most common,” said Budi when met in Jakarta, Wednesday (29/5/2024).

However, with the dynamics and development of society’s needs, several insurance companies have begun to offer protection against suicide, but with certain exceptions. One common condition is that the life insurance product will not cover suicide in the first two years after the policy is active. “So, if a suicide occurs in the first two years, it will not be covered,” added Budi.

Budi also highlighted that suicide, according to religious norms, is an act that is not justified. This creates a dilemma for insurance companies. “If insurance covers suicide, it gives the impression of justifying actions that are not religiously permitted,” he explained. Apart from that, insurance companies are also worried about the potential for moral hazard, where someone might buy an insurance product with the intention of committing suicide, feeling protected from all consequences.

Furthermore, Budi revealed that insurance companies that provide coverage for suicides with the exception of the first two years have certain reasons. They believe that the decision to commit suicide is usually impulsive and not something planned in advance. “Generally, it’s impulsive,” he said.

With this explanation, it is hoped that the public can understand better the provisions and exceptions in life insurance protection related to suicide cases. This information is important so that policyholders can make wiser decisions in choosing insurance products that suit their needs and conditions.

Source : https://money.kompas.com/read/2024/05/30/140000126/apakah-bunuh-diri-ditanggung-asuransi- 

 

New Tapera Regulations Projected to Impact Group Life Insurance Premium Income

The Indonesian Life Insurance Association (AAJI) estimates that new regulations regarding contributions for Public Housing Savings (Tapera) will affect group life insurance premium income. Chairman of the AAJI Management Board, Budi Tampubolon, explained that the additional costs that the company must incur for Tapera contributions could have an impact on the allocation of funds for employee life insurance premiums.

“This contribution to Tapera creates additional costs of 2.5 percent of the worker’s salary and 0.5 percent of the company’s share. Maybe for group insurance, there will be a slight impact because of this 0.5 percent, but we believe the impact is not too big ,” said Budi in the Q1 2024 Life Insurance Industry Performance press conference, Wednesday (29/5/2024).

Budi explained that group health insurance premium income had experienced similar pressure when the government first introduced the BPJS Health program in 2013-2014. However, after initial adjustments, premium income increased again. “The impact of Tapera contributions may be similar to when BPJS Health was just implemented. Initially it had a small impact on group health insurance, but then it increased again,” he added.

Companies are projected to adjust their employee group health premium contributions to follow the Tapera contribution rules. “Essentially, this is an additional deduction for something good, but in the short term perhaps some companies will focus on this (Tapera contributions) first compared to others,” explained Budi.

Meanwhile, the Tapera contribution regulations are projected to have a more minimal impact on individual health insurance. The profile of individual insurance owners, the majority of whom come from the upper middle class, means that Tapera contributions do not have a significant impact on them. “For individual businesses, there is an impact, but not too big,” said Budi.

Budi believes that the aim of the Tapera contribution program is very good. Although in the initial period there may be friction in opinion due to a lack of understanding about this program, the positive impact is an increase in public awareness about the importance of housing savings. “The most positive impact of this government program is increasing public awareness,” he said.

For information, President Joko Widodo (Jokowi) has issued new regulations regarding contributions for Public Housing Savings (Tapera) through Government Regulation (PP) Number 21 of 2024. This regulation amends Government Regulation Number 25 of 2020 concerning the Implementation of Tapera. One of the main points in this provision is the contribution deduction for workers for Tapera membership of 3 percent of salary or wages, with 0.5 percent borne by the employer and 2.5 percent by the worker, as regulated in article 15 PP Number 21 of 2024 .

With this new regulation, it is hoped that it will increase public awareness and participation in the Public Housing Savings program, although there are initial adjustments that need to be made by companies and workers.

Source : https://money.kompas.com/read/2024/05/29/184200826/dampak-aturan-iuran-tapera-bagi-industi-asuransi-jiwa-indonesia 

 

PT Pos Indonesia and Jasindo Insurance Collaborate to Improve Agricultural and Livestock Insurance Services

PT Pos Indonesia (Persero) and Jasindo Insurance recently signed a strategic collaboration to improve policy distribution services and disbursement of claim funds for the Rice Farming Business Insurance Assignment Program (AUTP) and Cattle/Buffalo Livestock Business Insurance (AUTS/K) for Fiscal Year 2024 . This initiative aims to provide the best service to farmers and breeders throughout Indonesia.

Jasindo Insurance Business Development Director, Diwe Novara, explained that this collaboration is an important step in ensuring that beneficiary farmers receive optimal service. “With this collaboration, we want to ensure that beneficiary farmers receive the best service, both in terms of sending policies and disbursing claim funds,” said Diwe in his official statement in Jakarta, Wednesday (29/5/2024).

In 2023, the realization of AUTP will reach 305 thousand hectares of land, while AUTS/K covers 20 thousand head of livestock. This collaboration is expected to increase this figure in 2024.

The signing of the Policy Distribution cooperation was carried out by the Director of Courier and Logistics Business of PT Pos Indonesia, Tonggo Marbun, at the Pos Indonesia head office in Bandung, West Java. Meanwhile, the agreement for Distribution of Claim Funds was signed by the Director of Financial Services Business of PT Pos Indonesia, Haris, and from Jasindo Insurance by Diwe Novara.

Through this collaboration, AUTP and AUTS/K policies will be directly received by farmers as policy holders. This initiative is expected to increase farmers’ awareness of the importance of insurance to protect their agricultural land. Apart from that, the disbursement of claim funds will be received directly by beneficiary farmers, where previously claim funds were often sent to group accounts and created obstacles in their distribution.

“With this new pattern of policy distribution and distribution of claim funds, we hope that the AUTP and AUTS/K programs will be more targeted and provide greater benefits to farmers,” added Diwe.

This collaboration is expected to not only increase the efficiency of policy distribution and disbursement of claim funds, but also expand the reach of agricultural insurance programs throughout Indonesia. Jasindo Insurance believes that with support from PT Pos Indonesia, this program can reach more farmers and ranchers, giving them the protection they need to manage risks and ensure the continuity of their businesses.

This collaboration is clear evidence of the commitment of both companies in supporting Indonesia’s agricultural and livestock sectors. With better services and wider coverage, it is hoped that the AUTP and AUTS/K programs can increasingly have a positive impact on farmers and livestock breeders throughout the country.

Source : https://www.liputan6.com/bisnis/read/5607106/klaim-asuransi-tani-kini-bisa-lewat-pos-indonesia?page=2 

 

Spike in Health Insurance Claims Triggers Crisis: Insurance Industry on the Verge of Danger

The surge in health insurance claims over the last two years has created a serious threat to the continuity of health insurance services. This critical situation has the potential to hit insurance companies hard and have a wide impact on society.

“What we are all worried about is that when health costs and health inflation continue to rise, premiums for health insurance will also continue to rise,” said Chairman of the Indonesian Life Insurance Association (AAJI) Management Board, Budi Tampubolon, in a press conference held on Wednesday ( 5/29/2024).

According to Budi, there is a big risk that insurance companies may decide to no longer offer health insurance services. This decision was taken because of the high risks that must be managed while people’s purchasing power is not enough to pay increasingly expensive premiums.

“If we can’t manage this risk, we might focus on other coverage, such as life insurance. Or maybe the insurance company can still manage it, but its customers can’t afford the ever-increasing premiums,” explained Budi.

AAJI identified two scenarios that could occur from this situation. First, some insurance companies may get out of the health insurance business. This is increasingly possible given increasingly stringent industry challenges, including tighter regulations, high capital requirements and difficult market conditions.

“It could be that one or two insurance companies, both life insurance and general insurance, decide to no longer provide health insurance coverage. Or, they still want to but with very many terms and conditions,” added Budi.

This first scenario will reduce the choice of health insurance products and services for people, which is of course not good news.

The second possible scenario is an increase in health insurance premiums. As a result, more and more people are unable to afford health insurance products. If this happens, people will rely more on financial protection from BPJS Health. This condition can open up a new risk gap, namely the potential for a deficit in the Social Security Fund (DJS) due to too heavy a burden on BPJS Health.

“Perhaps that is not something that is good for Indonesia. Because we are afraid that BPJS Health will be under pressure again, have another deficit, and so on,” said Budi.

Over the past two years, health insurance claims have continued to increase significantly. In fact, the claims ratio has exceeded 100%, forcing several commercial insurance companies to withdraw from this service. In the life insurance sector, health insurance claims in the first quarter of 2024 jumped 29.6% on an annual basis to IDR 5.96 trillion, although the trend of this claim spike was lower than in the first quarter of 2023 which reached 38.6%.

This situation shows how urgent the need for solutions is to overcome the surge in claims and ensure the sustainability of health insurance services in Indonesia. Without concrete steps, either from insurance companies or the government, this crisis could have a negative impact not only on the insurance industry, but also on the welfare of society at large.

Source : https://investor.id/finance/362846/krisis-asuransi-kesehatan-begini-dampaknya-di-masa-depan/1 

This news is brought to you by L&G Insurance Brokers, insurance broker experienced in Indonesia.

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