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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Poor Air Quality in Jakarta Triggers Spike in ISPA Cases and Increases Health Insurance Claims
Recently, the concern for air quality in DKI Jakarta has increased significantly and even entered the unhealthy category. This situation has made people more vulnerable to acute respiratory infections (ARI).
Based on a report released by the DKI Jakarta Health Service from January to June 2023, 638,291 cases of ISPA were recorded. This figure can be broken down as follows: January with 102,609 patients, February with 104,638 cases, March with 119,734 cases, April with 109,705 cases, May with 99,130 cases, and June with 102,475 points.
The impact of poor air quality and the increase in ISPA cases is also felt in health insurance claims, particularly in the life insurance sector.
According to Plt. Main Director of PT BNI Life Insurance, Eben Eser Nainggolan, the poor air situation in Jakarta and high air pollution have contributed to the spread of respiratory infections, resulting in many people contracting ISPA. He stated to Kontan.co.id that under these conditions, health insurance claims related to ISPA tend to increase due to the impact of air pollution.
Eben reported that BNI Life had paid claims related to ISPA to more than 29,000 customers as of July 2023, with a total share of around IDR 14 billion.
He also emphasized the importance of finding solutions to address the poor air quality in Jakarta. Steps such as implementing work-from-home (WFH) taken by the Jakarta Regional Government are short-term measures to protect public health.
Eben also appealed to the public to maintain personal health, including cleanliness and wearing masks. If the air condition is terrible, it is advisable to avoid outdoor activities, especially for vulnerable groups such as children, the elderly, or individuals with weak health conditions.
“After being outdoors, be sure to clean your face and hands with clean water to prevent harmful particles from entering our bodies,” he added.
Meanwhile, PT Asuransi Jiwa Generali Indonesia also experienced increased claims related to ISPA. Claims of more than 16,500 cases have been recorded from January to July 2023, with total shares reaching IDR 14.59 billion.
Vivin Arbianti Gautama, Chief Marketing Officer of Generali, explained that ISPA was indeed a common claim diagnosis in society, even before the issue of air pollution arose. To deal with this ISPA diagnosis, Generali provides health protection according to the policy provisions of each customer.
Vivin also advises the public to strengthen their body’s immunity and anticipate the risk of exposure to ARI. By adopting a healthy lifestyle, washing hands frequently, consuming nutritious food, regularly taking vitamins, and avoiding smoking.
“For those who are in an environment with high air pollution, it is advisable to limit activities outside the home or use a mask when going out, and what is equally important is to exercise regularly to strengthen the immune system,” he concluded.
Allianz Indonesia is Committed to Supporting Financial Inclusion Through Insurance Education and Disability-Friendly Services
Allianz Indonesia has shown its support for the efforts of the Financial Services Authority (OJK) to achieve equality in financial inclusion. This step involves providing education about insurance and implementing disability-friendly services.
Recently, Allianz Indonesia took part in an event organized by OJK, Financial Education for Persons with Disabilities, with the theme “Towards a Financially Independent Indonesian Society.” This event invited several Financial Services Businesses (PUJK) to provide an understanding of insurance to financial education participants.
As a company that focuses on insurance solutions and services, Allianz Indonesia works hard to develop solutions and services that can meet the various insurance needs of its customers. They have provided a variety of insurance products that suit individual characteristics.
One example is the economical and straightforward micro-life insurance product, which protects people who still need a personal insurance policy.
Frederica Widyasari Dewi, Chief Executive of OJK’s Chief Executive for the Conduct of Financial Services Businesses, Education and Consumer Protection, who was also present at the educational event for persons with disabilities, revealed that OJK aims to create an Indonesian society that is financially independent through financial inclusion and equal rights. One way to achieve this goal is through adequate financial literacy, which can increase financial inclusion, including for persons with disabilities.
Allianz Indonesia has also committed to providing Sekoci micro life insurance protection to Financial Education participants. This protection includes cash compensation to the family left behind if the insured faces the risk of death.
Besides focusing on insurance protection, Allianz Indonesia prioritizes customer convenience, especially those with disabilities. They have implemented services that are friendly to persons with disabilities, such as special access, ramp facilities, wheelchairs, queue priority, and accessible and disability-friendly customer service areas.
In this effort, Allianz Indonesia has shown its determination to support financial inclusion and provide protection and easy access to various groups of people, including those with special needs.
Impact of PAYDI: Life Insurance Industry Experiences 9.9% Decrease in Premium Income
The Indonesian Life Insurance Industry reported a 9.9% decline in premium income during the first half of 2023, indicating a negative effect of Invested Insurance Products (PAYDI). Data as of June 2023 recorded that the industry’s total premium income reached IDR 86.23 trillion. Chairman of the Board of Management of the Indonesian Life Insurance Association (AAJI), Budi Tampubolon, acknowledged that one of the reasons for this decline was the impact of PAYDI alignment.
Budi Tampubolon explained that the Financial Services Authority (OJK) regulation No. 5 regarding PAYDI affects industry performance. Some AAJI members have complied with these regulations quickly, while others have taken longer. Budi emphasized that the industry remains committed to providing relevant insurance products to the public.
One of the interesting points is the change in the composition of PAYDI’s premium income and traditional premiums. In this semester, excellent income from conventional life insurance products exceeded PAYDI. This is the first time in many years where revenue from traditional products dominates.
Regarding product type, premium income from traditional life insurance recorded a 12% increase, reaching IDR 43.67 trillion. Meanwhile, PAYDI contributed 42.56% with a total revenue of Rp. 42.56 trillion.
This change shows that people are increasingly selective in choosing the type of life insurance that suits their needs. The growth in premium income from traditional products is a breath of fresh air in efforts to create a sustainable business in this sector.
Overall, the life insurance industry recorded a total revenue of IDR 107.32 trillion as of June 2023, an increase of 1.8% compared to the same period the previous year. This increase was mainly driven by investment returns, which increased by 241.5%, according to Budi Tampubolon.
Life Insurance is Vibrant in the ESG Sector: An Attractive Investment That Many Companies Look At
Based on OJK Regulation No. 51 of 2017, Financial Institutions, Including Insurance, are Obliged to Implement a Sustainable Business
The Financial Services Authority (OJK) established Regulation 51 of 2017, which requires financial institutions, including insurance companies, to apply sustainable business principles. One way to implement it is by making investments following environmental, social, and governance (ESG) directions.
Although there are no definite rules regarding investment with ESG principles, several life insurance companies have started to adopt sustainable investment programs, especially in the scope of ESG.
Eben Eser Nainggolan, Plt. The Main Director of PT BNI Life Insurance (BNI Life) revealed that BNI Life’s investment portfolio that follows ESG principles currently reaches 5.25%.
The investment sector with ESG principles emphasized by BNI Life includes finance, raw goods, industry, primary consumer goods, infrastructure, and health.
On the other hand, investment in bond instruments that contribute to ESG still has a relatively small share, only around 0.1%. This is due to the limited availability of green bonds.
Iwan Pasila, Main Director of PT Asuransi BRI Life (BRI Life), explained that BRI Life’s investment portfolio with ESG principles only includes green bonds worth IDR 364 billion as of July 2023.
The composition of green bond assets in BRI Life’s total investment is around 2.4%. BRI Life continues to carry out investment strategies by investment policy criteria that refer to asset quality, liability characteristics, duration, and liquidity.
In support of ESG, AIA Group has been divesting from the coal sector since 2021. This step is considered a real contribution to improving the environment.
Nonetheless, Simon Imanto, Head of Finance, Capital, Investment, and Tax of the Indonesian Life Insurance Association (AAJI), stated that investment portfolios with ESG principles are still limited, especially in the Sharia context.
AAJI is currently discussing with OJK and the capital market to discuss further ESG investments, including those that follow Sharia principles.
22% of General Insurance Companies Have Equity Above IDR 1 Trillion, Recorded by AAUI
The Financial Services Authority (OJK) has passed a minimum capital requirement of IDR 100 billion for conventional insurance companies, including general insurance, to strengthen the industrial sector and increase insurance competitiveness.
As a forum for general insurance companies, the Indonesian General Insurance Association (AAUI) fully supports this determination, considering it an essential step in strengthening the industry and increasing insurance competitiveness.
AAUI Executive Director Bern Dwyanto stated that AAUI data for the first half of 2023 shows that of the 72 members of general insurance companies, 16, or around 22%, have equity above IDR 1 trillion.
Furthermore, there are 9 companies, or around 13%, with equity between IDR 500 billion and IDR 1 trillion. 34 companies, or about 47%, followed her, with equity from IDR 150 billion to IDR 500 billion.
Even so, 13 companies, or around 18%, still have equity below IDR 150 billion.
Two companies with over IDR 1 trillion in capital are Asuransi Wahana Tata (Aswata) and Asuransi Tugu Pratama Indonesia (Tugu Insurance).
Aswata has exceeded the capital threshold of IDR 1 trillion, and the President Director of Aswata, Christian Wanandi, emphasized his company’s commitment to improving business quality to produce profitable underwriting results.
Christian mentioned several challenges, including implementing IFRS17, complex reinsurance market movements, and economic fluctuations in Indonesia.
Tugu Insurance also claims to have successfully recorded operating capital per Semester I-2023 of IDR 6.6 trillion.
President Director of Tugu Insurance, Tatang Nurhidayat, said that the company had met the capital requirements set by the OJK.
AAUI also proposed that OJK adjust the minimum capital according to the stages. This proposal covers general insurance companies with a minimum capital of IDR 250 billion by the end of 2026, while reinsurance companies are set at IDR 500 billion.
Of course, this proposal could impact the company’s plans for business expansion, which would require a capital increase. Therefore, AAUI sees the need for gradual steps in strengthening the company’s capital.
Astra Financial’s Impressive Achievements: Triple Digit Growth in the Insurance Business at GIIAS 2023
During the GAIKINDO Indonesia International Auto Show (GIIAS) 2023 automotive exhibition at the Indonesia Convention Exhibition (ICE) BSD City, Tangerang, on 10-20 August 2023, the insurance segment from Astra Financial managed to record impressive achievements.
Tan Chian Hok, Project Director of Astra Financial at GIIAS 2023, stated that Asuransi Astra recorded a positive achievement with the value of insurance premiums for cash purchases during GIIAS 2023, which reached IDR 2.28 billion.
“In comparison with GIIAS 2022, which recorded a value of IDR 1.06 billion, this figure has increased by 114%,” he said in an official statement on Wednesday (23/8).
Tan added that Astra Life, part of Astra Financial, recorded positive growth with a credit life insurance value of IDR 26.68 billion during GIIAS 2023. This figure has increased by 122% compared to the previous year, reaching only IDR 12.05 billion.
Regarding transaction value, Astra Financial recorded a total transaction of IDR 2.38 trillion during GIIAS 2023. This figure has increased by 53% compared to the previous year, reaching IDR 1.56 trillion.
Initially, Astra Financial targeted a transaction value of IDR 2.3 trillion for GIIAS Jakarta and Surabaya. However, until the closing of GIIAS 2023 in Jakarta, the transaction value reached IDR 2.38 trillion, exceeding the set target.
Which Leading Strategy Is More Effective: Selling Insurance Online or Through a Marketer? AAJI Provides Views
The digital era challenges insurance sales agents because customers can buy products online. In this regard, the Indonesian Life Insurance Association (AAJI) acknowledges that sales effectiveness through online platforms or traditional marketing agents depends on the type of insurance products offered.
Togar Pasaribu, Executive Director of AAJI, stated that each product has a different level of complexity. For relatively simple products, selling online is an efficient and effective solution.
However, the face-to-face sales method remains more effective for more complex products, such as Invested Insurance Products (PAYDI). Pasaribu explained that this was because consumers needed to understand deeply about the product.
Meanwhile, AAJI acknowledges that conventional distribution channels such as insurance agents and bancassurance still have an essential role in generating premium income for life insurance companies. Premium income from the two channels was recorded to IDR 33.5 trillion, or around 73.4% of total premium income in the first quarter of 2023. However, this figure has decreased by about 8.3% compared to the first quarter of 2022.
On the other hand, premium income from e-commerce channels, which reached around IDR 55.6 billion, only contributed 0.12% of total premium income in the first quarter of 2023. Nonetheless, this channel experienced significant growth, reaching 87.9% compared to the first quarter of 2022, according to Togar.
This information is provided by L&G Insurance Broker – The Smart Insurance Broker.
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