Liga Asuransi – Hello risk takers, in the fifth week of April 2024 we will once again discuss 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 also The scope of objects that can be insured is very wide, 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.
As always, if you are interested in this article, please share it with your colleagues so they can understand it as well as you.
PT Asuransi Asei Indonesia Records Positive Growth in Underwriting Results
PT Asuransi Asei Indonesia succeeded in recording positive underwriting results throughout 2023, showing satisfactory performance amidst the dynamics of the insurance market. Based on the financial report as of December 31 2023, underwriting results reached IDR 119 billion, recording an increase of 20.7% on an annual basis (year-on-year/yoy) from the same period in the previous year.
Even though the company’s premium income decreased by 41.2% yoy, down to IDR 288 billion from the previous IDR 491 billion, the total operating expenses borne were successfully reduced to IDR 91.4 billion, down 8.3% yoy from the previous IDR 99.7 billion.
In terms of equity, Asei Indonesia recorded equity of IDR 466 billion in 2023, although it experienced a decrease of 5.13% compared to the previous year. Meanwhile, the company’s liabilities will increase to IDR 1.36 trillion in 2023, an increase of 10.25% compared to the previous year.
Regarding assets, Asei Indonesia recorded an increase of 4.72% yoy, reaching IDR 2.3 trillion in 2023 from the previous IDR 2.13 trillion in 2022. However, the company’s financial health level, seen from Risk Based Capital (RBC), experienced decreasing to 265.38% in 2023 from the previous 328.14% in 2022.
On the financial report side of the Asei Indonesia Sharia Business Unit (UUS), a significant increase in profit was recorded at IDR 7.5 billion, up 413.2% compared to the previous year. Insurance income also increased to IDR 815 million in 2023, up 7.37% yoy from the previous year. However, insurance expenses also increased quite significantly to IDR 2.4 billion in 2023, up 1,245% yoy from the previous year.
However, UUS Asei Indonesia experienced a tabarru fund deficit of IDR 973 million in 2023, in contrast to the previous year which recorded a surplus of IDR 1.15 billion. This indicates the need for greater attention to risk management and financial management to ensure optimal financial health.
With positive performance but challenges that cannot be ignored, PT Asuransi Asei Indonesia continues to strive to strengthen its position in the insurance market and ensure quality service for its customers.
Antonius NS Kosasih was removed from the position of Main Director of Taspen after the Corruption Case Investigation was recorded
The following day, after being banned from going abroad by the Corruption Eradication Commission (KPK) in early March, Nontonius NS Kosasih, Main Director of PT Tabungan dan Asuransi Pegawai Negeri (Taspen), was removed from his position. This step was taken after the Corruption Eradication Commission (KPK) initiated an investigation into alleged corruption in PT Taspen’s investment management in 2019. Together with Kosasih, Ekiawan Heri Primaryanto, President Director of PT Insight Investments Management, was also prohibited from leaving the country.
Although there has been no official announcement regarding the identity of the suspect, the Corruption Eradication Commission (KPK) has escalated this case to the investigation stage and named the suspects. The Ministry of State-Owned Enterprises (BUMN) then chose to remove Antonius NS Kosasih after reviewing the case against him. They stated their readiness to provide the necessary data if requested by the Corruption Eradication Commission.
The investigation into this case began after the Financial Audit Agency (BPK) reported the results of its examination of Taspen’s investment management. Findings from the BPK revealed a mutual fund investment management scheme between Taspen and PT Insight Investment Management (IIM), which experienced a decline in investment value of up to 29.63% or around IDR 296.25 billion.
In the investigation process, the Corruption Eradication Committee (KPK) has collected information from various parties, including Kosasih’s ex-wife, Rina Lauwy, as well as several former high-ranking Taspen officials. The potential state losses from this investment management scheme are being calculated by the KPK.
Apart from highlighting the problem of mutual fund investment, the BPK also revealed other findings regarding Taspen’s investment management, including the company’s solvency and management of share investments which have not increased in value from year to year.
This case is in the main spotlight considering similar problems that occurred at PT Asuransi Jiwasraya and PT Asabri in the previous year. Insurance observers warn of the need for strict supervision of government-owned insurance companies to prevent similar cases from recurring in the future.
Currently, the Corruption Eradication Commission (KPK) is still continuing to carry out further investigations to uncover allegations of corruption in Taspen’s investment management. A number of parties, including the Ministry of BUMN, are committed to supporting this legal process and ensuring transparency and fairness in the handling of this case.
Prudential Indonesia Highlights the Challenge of Rising Medical Inflation in the Insurance Industry
In the Full Year Performance (FYP) 2023 press conference held in Jakarta on Thursday, April 25 2024, PT Prudential Life Assurance (Prudential Indonesia) highlighted one of the main challenges faced by the life insurance industry currently, namely the increase in medical inflation which has reached double digits.
President Director of Prudential Indonesia, Tony Benitez, revealed that medical inflation had exceeded general inflation, reaching 13.6% during that period. This increase in medical inflation has an impact on increasing health claims by 24.9% or reaching IDR 21 trillion during 2023.
One of the main factors causing a significant spike in medical claims is the continued improvement of technology in the medical field. This not only increases the cost of medical bills, but also leads to treatment that exceeds the original estimate.
Apart from the increase in medical inflation, Tony also highlighted other challenges faced by the insurance industry, namely the low level of insurance literacy and penetration in Indonesia. Currently, the insurance literacy level in Indonesia only reaches 31.7%, which is lower than the financial literacy level which reaches 49.7%. In addition, insurance penetration in Indonesia is only 0.9%, which is much lower compared to neighboring countries such as Singapore, Thailand, Malaysia and Vietnam.
Prudential Indonesia emphasizes that increasing insurance literacy and increasing insurance penetration in Indonesia is a crucial step in ensuring adequate financial protection for the public. Through a holistic and educational approach, Prudential is committed to continuing to support increasing insurance literacy and penetration in Indonesia, so that people can understand the importance of insurance protection in facing health and financial risks in the future.
IFG Life Records Triple Premium Income in the First Quarter of 2024
PT Asuransi Jiwa IFG (IFG Life), a life insurance company under the holding of the State-Owned Enterprise (BUMN) Indonesia Financial Group (IFG), has recorded premium income of IDR 390 billion in the first quarter of 2024. This is a three-fold increase compared to the same period in the previous year, where premium income only reached IDR 118 billion.
Gatot Haryadi, Head of Corporate Secretary IFG Life, explained that IFG Life’s premium income is dominated by traditional premiums at 96%. According to him, traditional products still dominate the company’s portfolio because they have large potential for regular premiums and top-ups. Gatot also added that public awareness of the importance of insurance as protection has increased, so they tend to choose traditional products such as term life, whole life and health insurance.
In an effort to continue to encourage sales of protection-based products, IFG Life will remain focused on the company’s vision and mission until the end of 2024. In addition, IFG Life will also optimize the management of its existing portfolio by making corporate business its main business, as well as carrying out development and transformation bancassurance and health insurance business.
Gatot also said that IFG Life has anticipated an increase in health insurance claims in the industry. To control medical costs, the company will monitor the provision of medical services and medicines to make them more efficient and effective. This is done to ensure that IFG Life customers get the best service from partner health facilities with premiums that remain affordable.
Health and Death Insurance Becomes People’s Main Choice After Eid
This type of insurance that covers health and protects against the risk of death is increasingly in demand by the public, especially after the Eid celebrations. Awareness of the importance of the benefits of insurance is increasing among the public.
According to the Director of PT Prudential Sharia Life Assurance (Prudential Syariah), Paul Setio Kartono, health insurance is one of the most sought after benefits after Eid. “Health is something that is close to everyone, because people can imagine what it feels like to be sick,” he explained in a press conference at the Shangri La Hotel, Jakarta, Thursday (25/4/2024).
Apart from health insurance, insurance for the risk of death, critical illness and education are also popular choices for people after Eid this year. Paul explained that although for some young people the risk of death may be unthinkable, it is important to understand that financial protection from this risk is very important.
One of the biggest challenges faced by insurance companies today is the low level of literacy among the public regarding the importance of having insurance. “Our biggest challenge is not in terms of competition, but in terms of literacy, how many people realize the importance of having insurance,” said Paul.
It should be noted that PT Prudential Life Assurance (Prudential Indonesia) and PT Prudential Sharia Life Assurance (Prudential Syariah) managed to record positive performance throughout 2023. Vice President of Prudential Indonesia, Tony Benitez, revealed that both of them managed to record total premium income and contributions, total assets , and the largest total investment assets in the industry.
“With total premium income and contributions reaching IDR 22 trillion, and total assets of IDR 66 trillion, we are the largest in the industry,” explained Tony in the same press conference. He also added that the company’s total investment assets throughout 2023 will reach IDR 59 trillion, with total claims and benefits paid reaching IDR 17 trillion.
Unit Linked Insurance Still Being Corrected, Recording Factor Is the Main Cause
Life insurance companies in Indonesia are facing challenges in selling unit linked insurance products, with one of the main factors of concern being the newly implemented recording process. According to the Indonesian Life Insurance Association (AAJI), several companies experienced a decrease in unit linked insurance premiums because not all customers agreed to be recorded in the product explanation process.
“The biggest problem currently related to unit linked products is the recording process, where some customers are reluctant to be recorded,” said AAJI Executive Director, Togar Pasaribu. Togar added that public complaints regarding the recording regulations had become a concern, and AAJI planned to discuss this with the Financial Services Authority (OJK).
These recording rules are regulated in OJK Circular Letter Number 5 of 2022 concerning Insurance Products Linked to Investment (SEOJK PAYDI). This rule requires life insurance companies to make a welcoming call to policyholders and document the process of explaining the product in recorded form.
Apart from recording issues, there are significant differences between SEOJK PAYDI and the previous rules regarding unit linked products:
- Product Criteria: SEOJK PAYDI regulates the criteria for unit linked products which must have a clear proportion of protection against the risk of death and investment benefits, as well as a specific investment strategy. Meanwhile, previous regulations focused more on the value of promised benefits and death risk coverage.
- Modal Minimal: SEOJK PAYDI regulates that insurance companies that market unit linked must have a minimum capital of IDR 150 billion – IDR 250 billion before running their business. The previous regulations did not regulate capital requirements.
- Natural Death Insured Value: SEOJK PAYDI sets the minimum value of the sum assured for natural death based on the premium or contribution paid, while the previous regulations set the value of the sum assured based on a certain amount or several times the premium.
Nevertheless, AAJI hopes to be able to discuss the recording rules again with the OJK, in the hope of finding a solution that can meet the needs of both insurance companies and customers.
Mega Insurance Claims Handling During the 2024 Eid Holidays Runs Stably, Annual Premium Growth Increases 30%
PT Asuransi General Mega (Mega Insurance) revealed that during the 2024 Eid holiday period, they received as many as 200 vehicle insurance claim applications. Although not specifically stating the total nominal amount of claims, the Director of Risk, Legal, & Compliance, Diang Edelina, stated that the average value per claim was almost the same and reached around IDR 6 million. This shows that the comparison of insurance claims during the Eid holiday this year is relatively stable when compared with the same period the previous year.
On the other hand, Mega Insurance also recorded significant growth in premium collection during the 2024 homecoming period, which increased by 30% on an annual basis compared to the same period in 2023. Diang stated that this growth came from the retail sector, especially from the addition of electric vehicles , as well as from increasing Mega Insurance’s market share among multi-finance partners and individual agents.
Mega Insurance’s Chief Technical Officer, Indrajaya Wardhana, revealed that the company has prepared a mitigation strategy in managing high-risk businesses. These steps include reducing accounts with the potential for large claims, such as lumber and textile mills. Mega Insurance also focuses on profitability compared to gross premiums, by selecting quality risks and increasing business partners outside CT Corp’s captive market.
Vehicle insurance remains the largest contributor to Mega Insurance, contributing around 36% of total premiums. Followed by the property and health insurance sectors. With this achievement, Mega Insurance recorded premium income of IDR 1.65 trillion in December 2023, showing a significant increase of 78.3% on an annual basis compared to the previous year.
This article is brought to you by L&G Insurance Broker, insurance broker Indonesia..
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