Liga Asuransi – Hello awesome readers, how are you? We hope your business is running successfully and smoothly. As usual, we will present exciting and up-to-date news according to the available information.
In the following, we have summarized seven of the latest news you can enjoy. If you are interested in this article, don’t hesitate to share it with your colleagues so they will get the same understanding as you.
OJK Review Minimum Insurance Capital, AAJI Suggests IDR 500 Billion in 2030
The insurance industry’s minimum equity limit is still being debated among various parties and has yet to reach a final agreement. The Indonesian Life Insurance Association (AAJI) submitted a proposal to reduce the plan to increase the equity value to meet the minimum equity requirements in the insurance sector, especially in the life insurance sector.
AAJI Executive Director, Togar Pasaribu, stated that AAJI proposed increasing the equity of life insurance companies in stages, from IDR 100 billion to IDR 500 billion in 2030. billion,” Togar told Bisnis on Thursday (15/6/2023).
The proposed increase in equity to IDR 500 billion is far different from the plan of the Financial Services Authority (OJK), which targets minimum equity of IDR 1 trillion in 2028. However, Togar stated that AAJI agreed to increase the minimum equity to IDR 1 trillion. “We agree with equity of IDR 1 trillion, but we are not too close to achieving it. Even so, several companies have exceeded this figure,” he said.
According to Togar, regulators must consider the situation and conditions before deciding on the insurance sector’s minimum equity of IDR 1 trillion. “We need to see the situation in 2026 and 2030, then evaluate it. After that, he explained that we could sit down together to determine a minimum equity figure of IDR 1 trillion,” he explained.
To avoid closing insurance companies and protecting policyholders, AAJI gives options to companies that do not reach their equity value at the stipulated time, among others, by conducting a merger or seeking new investors. “Another option is to limit business activities, such as a ban on selling Paydi products. Or, other options according to OJK policies and considerations,” he added.
OJK has also invited several associations in the insurance sector to discuss increasing the minimum equity. OJK’s Chief Executive for Supervision of Insurance, Underwriting, and Pension Funds, Ogi Prastomiyono, said that the OJK is currently awaiting written responses from three associations, namely AAJI, the Indonesian General Insurance Association (AAUI), and the Indonesian Sharia Insurance Association (AASI). The answer will soon be submitted to the OJK.
Ogi stated that insurance industry players generally agree on the importance of strengthening capital and equity in the insurance sector. They also provide input regarding the amount of money for insurance companies and the extension of the stages of fulfilling these capital requirements.
Currently, OJK is finalizing regulations related to increasing capital and equity and the stages of fulfillment, considering input from industry players.
OJK thinks the capital increase policy is necessary to strengthen the insurance industry’s structure, resilience, and competitiveness, increase the company’s economic scale, and face the challenges and demands for innovation of technology-based insurance products and services.
As a reference, currently, the minimum equity limit for insurance companies is IDR 100 billion, while reinsurance companies are IDR 200 billion. The minimum limit for Sharia insurance is IDR 50 billion, while for Sharia reinsurance, it is IDR 100 billion.
OJK plans to increase the minimum equity limit for insurance companies gradually. For example, the minimum equity threshold for insurance companies will be increased from IDR 100 billion to IDR 500 billion in 2026 and IDR 1 trillion in 2028.
For conventional reinsurance companies, the minimum equity threshold will increase from IDR 200 billion to IDR 1 trillion in 2026 and IDR 2 trillion in 2028.
Meanwhile, the minimum equity threshold for sharia insurance companies will increase from IDR 50 billion to IDR 250 billion in 2026 and IDR 500 billion in 2028. For sharia reinsurance companies, the minimum equity threshold will rise from IDR 100 billion to IDR 500 billion in 2026 and IDR 1 trillion in 2028.
On the other hand, an insurance company that has just obtained a license from the OJK will have a higher minimum equity requirement than an existing company. For example, the minimum equity for a newly licensed insurance company is IDR 1 trillion.
For conventional reinsurance companies, the requirement is IDR 2 trillion, while for sharia insurance companies, it is IDR 500 billion, and for sharia reinsurance companies, it is IDR 1 trillion.
In conclusion, discussions regarding the insurance industry’s minimum equity limit are ongoing, and the parties involved are seeking an agreement. AAJI is proposing a gradual increase in equity, while OJK is finalizing regulations related to increasing capital and equity.
These changes aim to strengthen the insurance industry, increase the resilience and competitiveness of companies, and deal with the development of technological innovation in this sector.
AAJI: Life Insurance Agents Become the Spearhead of the Industry
The Indonesian Life Insurance Association (AAJI) underlined the role of life insurance agents, who continue to be the backbone of penetrating the life insurance industry. Togar Pasaribu, Executive Director of AAJI, stated that an insurance agent could also increase financial inclusion and life insurance literacy in society. Togar emphasized that AAJI continues to support various efforts to improve the competency and knowledge of life insurance agents.
“Agents remain one of Indonesia’s main pillars of the life insurance industry. Companies will face difficulties marketing their products without a life insurance agent,” said Togar in an MDRT press conference held at Rumah AAJI, Jakarta, on Wednesday (14/6/2023 ).
Based on the performance of 56 life insurance companies in the first quarter of 2023, AAJI noted that the number of insureds reached 87.54 million people. In detail, it consists of 29.74 million individual insureds and 57.80 million group insureds. Compared to the achievements in the first quarter of 2022, there were more than 12 million insureds overall, or an increase of 16.6 percent annually (year-on-year/yoy).
Regarding income, the life insurance industry recorded a total revenue of IDR 54.36 trillion as of March 31, 2023. Togar explained that the growth in the number of insureds is closely related to marketing performance. According to him, this shows that people’s understanding of the protection function of life insurance is increasing.
“This is a capital for industry players to provide services and various product choices to meet people’s needs,” he added.
However, until the first quarter of 2023, AAJI recorded a decrease in life insurance agents from 600,000 in the first quarter of 2022 to around 500,000 in the first three months of 2023. Togar stated that the projected number of agents would continue to decline in line with the implementation of PAYDI regulations in the life insurance industry.
“This year, the projected number of agents will decrease again. If the number of agents does not increase, the growth in the number of insureds will also be hampered,” he continued.
Even so, Togar emphasized that life insurance agents have promising career opportunities because they earn income from their hard work.
“This is the fairest profession. They [agents] are life insurance company partners, not employees, so they don’t get paid. That means they get a commission, and if they don’t work, they don’t get any money,” he said.
Supporting Financial Literacy, Panin Dai-ichi Life Wants People to Be More Aware of Insurance
Based on the results of the National Financial Literacy and Inclusion Survey conducted by the Financial Services Authority (OJK) in 2022, the financial literacy level of the Indonesian people in terms of insurance is still low, only reaching 31.72%, compared to the national financial literacy level of 49.68%. .
In this context, Panin Dai-ichi Life realizes the importance of routine financial literacy activities, especially regarding insurance. In collaboration with the Citra Binar Rahma Community Learning Activity Center (PKBM) in West Jakarta, Panin Dai-ichi Life held financial literacy activities as part of the 2023 Financial Inclusion Month (BIK) series as well as a Corporate Social Responsibility (CSR) program on Friday, 9 June 2023, which is addressed to parents and guardians of students for Early Childhood Education (PAUD).
Dr attended this event. Ernawati Malikin, Chief Medical Officer of Panin Dai-ichi Life, Andre Yoginata, Head of Marketing and Corporate Communications of Panin Dai-ichi Life, and Dewi Rachmawati, Msi., Acting Plt. The Principal, Syuriyah, Spd., Deputy Principal, and Ade Saepudin, S.Hum, as the Head of PKBM Citra Binar Rahma.
The activity begins with a financial literacy session which includes socialization regarding financial planning, insurance, and risk. Furthermore, the event continued with the presentation of donations in school supplies, school bags, and stationery.
President Director of Panin Dai-ichi Life, Fadjar Gunawan, revealed that increasing financial understanding and literacy is an active step by the company to ensure that people can choose and utilize insurance products and services according to their needs so that people have better abilities in financial planning.
“Through financial literacy activities like this, we want to ensure that the public understands that life insurance functions as protection, both for life and health,” said Fadjar Gunawan in an official statement published on Monday (12/6).
OJK: Kresna Life Has Not Fulfilled Commitments, Zero Capital Injections from Shareholders
The Financial Services Authority (OJK) announced that until now, PT Asuransi Jiwa Kresna Life (Kresna Life) has yet to fulfill its commitment to corporate restructuring. OJK’s Chief Executive for Supervision of Insurance, Underwriting, and Pension Funds, Ogi Prastomiyono, stated that the Financial Restructuring Plan (RPK) submitted by Kresna Life to OJK on 30 December 2022 and the revision of the RPK on 20 February 2023, which involves an additional capital, are still not yet implemented.
“Errors in managing the company, as well as the lack of commitment and sincerity from shareholders to carry out financial restructuring through additional capital, have prolonged the problems faced by Kresna Life,” said Ogi in an official statement issued on Thursday (15/6/2023).
Ogi also revealed that Kresna Life did not make alternative efforts to increase capital through controlling shareholders (PSP) or establishing partnerships with strategic investors. Instead, they only proposed a scheme for converting obligations to policyholders into subordinated loans (SOL).
“However, this conversion scheme cannot help Kresna Life’s liquidity because there is no inflow of funds as additional capital,” said Ogi.
In addition, Ogi stated that Kresna Life had also not submitted documents resulting from the SOL conversion agreement from policyholders who had approved it and had notarized it.
“OJK has given Kresna Life sufficient time since January 2023 to transparently inform policyholders of the risks and consequences of the SOL conversion program and asked Kresna Life to place funds in an escrow account as a commitment to increase capital,” he explained.
On June 5, 2023, OJK received 32 boxes containing copies of documents, including 10 boxes of copies of the SOL conversion program approval and 22 boxes of copies of the SOL conversion agreement. However, according to Ogi, these documents are accompanied by a letter of introduction from a party not the main party of Kresna Life, which is recorded in the OJK database.
“In the document, there is no notarized copy of the SOL agreement according to the provisions,” he added. Apart from that, in the 32 boxes of documents submitted, there was no evidence of the placement of funds in an escrow account.
Furthermore, OJK is currently conducting direct verification with some Kresna Life policyholders in various cities to obtain information regarding the implementation of SOL conversion from the policyholder’s perspective and provide a more detailed explanation of the provisions governing SOL conversion.
On the other hand, OJK respects all applicable legal processes related to determining the Main Director of Kresna Life as a suspect by Bareskrim Polri for alleged embezzlement, insurance crimes, and money laundering crimes.
OJK is committed to continuously overseeing and ensuring the compliance of life insurance companies with applicable regulations and protecting the interests of customers and policyholders. OJK also invites Kresna Life to take the necessary steps to fulfill the company’s restructuring commitment and maintain public trust in the life insurance industry.
“We hope that Kresna Life can immediately resolve this problem and take the necessary actions to restore the company’s financial condition,” said Ogi.
OJK will continue to monitor developments in Kresna Life’s situation and take necessary actions following applicable regulations to maintain stability and trust in the life insurance industry in Indonesia.
Government Makes Sure Pilgrims Are Protected by Life and Accident Insurance
The government ensures that regular pilgrims will get life insurance and accident insurance.
The Director of Domestic Hajj Services, Saiful Mujab, explained that the insurance would cover from the time the pilgrims enter the Hajj embarkation hostel until they return to the Hajj debarkation. If the pilgrim dies, he will receive insurance for the expenses of the pilgrimage (Bipih) that have been paid.
“In the event of an accident, insurance claims will be calculated based on the level of severity experienced by the congregation. There is also an additional protection. Pilgrims who die on the plane will receive additional protection of IDR 125 million. This is an effort to protect the congregation,” said Saiful in his statement. quoted on Monday (12/6/2023).
If the congregation suffers permanent disability due to an accident, they will receive compensation in varying amounts, between 2.5 percent and 100 percent from Bipih.
The process of obtaining this insurance is carried out by the Directorate General of Hajj and Umrah Management. Insurance claims will be paid by transfer to the congregation’s account. However, until now, the Hajj insurance provider has not yet been announced.
Based on data from the Siskohat Information System, 29 pilgrims have died. A total of 23 pilgrims died in Medina, and six pilgrims died in Mecca.
Hajj operations have been going on since May 23, 2023. The departure of the first batch of Indonesian pilgrims to Amir Muhammad bin Abdul Aziz Airport (AMAA) in Medina ended on June 8, 2023, with the arrival of the 38th group of pilgrims from Jakarta-Bekasi Embarkation (JKS 38).
In total, 263 flight groups with 100,001 pilgrims landed in Medina between May 24 and June 8, 2022. Starting June 1, 2023, pilgrims arriving in Medina will gradually depart for Mecca.
As of Friday, 9 June 2023, at 01.00 WIB, it was recorded that 120 flight groups with 46,341 pilgrims had arrived in Mecca from Medina. This year, Indonesia’s haj quota has returned to normal with 221,000 people, consisting of 203,320 regular haj pilgrims and 17,680 special haj pilgrims. In addition, Indonesia also received an additional quota of 8,000 from Saudi Arabia.
AXA Mandiri Launches The Right Micro Insurance
Life insurance company PT AXA Mandiri Financial Services (AXA Mandiri) has launched a new insurance product called Mandiri Micro Life Protected Insurance (Si Jitu).
Si Jitu is designed with affordable premiums to provide solutions to all levels of society, including Micro, Small, and Medium Enterprises (MSMEs) and workers in the micro, small and medium sector.
This product was developed as part of the company’s commitment to increase financial service inclusion, especially for people who face difficulty accessing it.
The Indonesian Life Insurance Association (AAJI) notes that only 10.4% of Indonesians have life insurance. Data from the Organization for Economic Co-Operation and Development (OECD) in 2021 also shows that the insurance penetration rate in Indonesia is only 1.6%. This figure is far behind compared to other ASEAN countries, such as Malaysia, with a penetration rate of 4.8%, and Singapore, with a penetration rate of 11.4%.
“To increase the inclusion of low life insurance services, we feel compelled to provide solutions that suit the community’s needs and are easily accessible and affordable to all groups, especially the Micro community,” said Director of AXA Mandiri, Rudi Nugraha.
Rudi added that this motivation aligned with AXA Mandiri’s commitment to increasing awareness of insurance protection in Indonesia.
Si Jitu protects customers with a compensation value of Rp. 12.5 million to Rp. 100 million in the event of death by paying a monthly premium of Rp. 25,000 to Rp. 200 thousand for eight years of insurance.
In addition, Si Jitu also offers a premium refund of 101% of the total premium if the customer is still alive when the insurance period ends.
In 2022, AXA Mandiri will pay claims of nearly IDR 12 trillion, an increase of 32% compared to the previous year, which reached IDR 9.05 trillion. This shows AXA Mandiri’s commitment to protection from all uncertainties to its customers.
Source: https://keuangan.kontan.co.id/news/axa-mandiri-luncurkan-asuransi-mikro-si-jitu
Opening a New Branch Office in Palembang, Fuse Insurtech Targets IDR 30 Billion Premium
Fuse, an insurance technology startup (insurtech), has opened a new branch office in Palembang, South Sumatra (Sumsel).
Hendra Lukman, Vice President of Fuse, said that Fuse has been in the city since 2021 with a small business scale and continues to experience growth.
“We believe that by opening a new representative operational office, we can improve services to agents/partners, get closer to end customers, and strengthen relationships with business partners in the South Sumatra region,” he said in Palembang on Thursday (15/6).
Ridho Revilino, Sales Director of Fuse, revealed they are targeting a premium of IDR 30 billion in the South Sumatra region this year. He said Fuse would focus on selling retail insurance, ranging from motor vehicle insurance to property insurance with simple risks such as houses, shophouses, and shops.
In addition, they are also developing a network of partner agents and expanding the types of products offered, including life insurance products. “We provide an opportunity for anyone to become a partner of Fuse Pro to earn extra income while protecting finances from risk.
He explained that through the Fuse Pro application, we offer convenience, from comparing and submitting policies, and disbursing commissions, to submitting claims,” he explained.
For information, by 2022, Fuse will have issued more than 150 million policies and recorded a Gross Premium Income/Gross Written Premium (GWP) of more than US$200 million or more than Rp.3 trillion.
This information is presented by L&G Insurance Broker – The Smart Insurance Broker.
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