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.
Association Reveals Causes of Debt Claims for Life Insurance Decreasing IDR 11.43 Trillion
The Indonesian Life Insurance Association (AAJI) explained the reason for the decrease in claims payable at life insurance companies to IDR 40 trillion in April 2023. Togar Pasaribu, Executive Director of AAJI, stated that claims payable refer to claims submitted by policyholders but are still in the verification process.
Togar said, “After the claim is verified, the company will pay it, so the amount owed on claims will decrease,” he explained to Bisnis on Wednesday (21/6/2023).
Based on data from the Financial Services Authority (OJK), established life insurance companies recorded a decrease in claims payable of 22.20 percent annually (year-on-year/yoy) from the same period in 2022, with claims payable reaching IDR 51.43 trillion.
Even though there was a decrease, Togar revealed that claims payable could increase at any time. “After the verification process is complete and the company pays claims, the amount owed on claims will decrease again. This process is repeated,” he said.
However, Togar emphasized that debt claims are not only related to company performance, including life insurance companies. “The trend of claims payable can be predicted, but the numbers can fluctuate. Usually, predictions are made by actuaries,” he added.
OJK data shows that the decline in claims payable at life insurance companies was partly due to a decrease in claims payable by 49.23 percent annually (year-on-year/yoy) to IDR 11.49 trillion.
During the first four months of 2023, reinsurance debt decreased by 7.71 percent yoy from IDR 4.09 trillion to IDR 3.76 trillion. Likewise, commission debt, which reached IDR 1.67 trillion in April 2022, decreased by 2.55 percent yoy.
In addition, the OJK also recorded a decrease in other debts by 1.48 percent yoy from IDR 17.55 trillion to IDR 17.29 trillion. As for accrued expenses, there was a slight decrease of 0.76 percent yoy to IDR 4.58 trillion from the initial value of IDR 4.61 trillion.
On the other hand, tax debt at life insurance companies jumped by 46.90 percent yoy. The amount increased from IDR 794.75 billion in April 2022 to IDR 1.17 trillion in April 2023.
Sequis Financial and J Trust Bank Launch Life Insurance Q Life Legacy
PT Asuransi Jiwa Sequis Financial (Sequis Financial) and PT Bank J Trust Indonesia (J Trust Bank) have launched the insurance product Q Life Legacy.
Q Life Legacy is a whole life insurance product that is valid until the age of 100 for J Trust Bank customers. This is the second collaboration between the two companies, having previously launched the Q Protection insurance product in 2022.
President Director of Sequis Financial, Edisjah, explained that Q Life Legacy is safe and secure, not affected by market fluctuations like unit link products.
“We continue to innovate to provide product solutions that provide a sense of security for our partner customers, namely J Trust Bank,” he said in an official statement in Jakarta on Monday (19/6).
Edisjah is optimistic that Q Life Legacy’s collaboration with J Trust Bank can increase the overall contribution through the In-Branch channel to more than 30% by the end of 2023.
“Now J Trust Bank customers can take advantage of Q Life Legacy products as protection and assets that can be developed for a better future,” he added.
Meanwhile, J Trust Bank Business Director, Widjaja Hendra, is optimistic that Q Life Legacy products will be in demand by J Trust Bank customers because the company always provides innovative and high-quality financial products and services with Japanese standards.
“Our customers can protect their assets from the risks of life that Sequis Financial will bear, and their savings at J Trust Bank remain safe and continue to grow,” he added.
For information, customers with Q Life Legacy can get protection from 1 month to 55 years with the Insurance Coverage Period (MPP) of up to 100 years.
The minimum Sum Insured (UP) is IDR 300 million, with a choice of premium payments for 5 or 10 years. If there is a risk of death, the heirs will receive 100% UP, and if the customer survives until the end of the MPP, then 100% UP will belong to the customer.
What’s the difference between traditional and unit-linked health insurance? These Types and Benefits
Health insurance is a critical protection product for every individual to protect themselves from medical expenses in the hospital.
However, there are two types of health insurance to choose from: traditional and unit-linked health insurance. These two types of insurance provide different benefits and advantages.
Traditional health insurance focuses on paying bills for health care in hospitals. Due to its pure nature, all premiums paid are used for maximum health protection.
Meanwhile, unit-linked health insurance is a combination of health protection and investment. Therefore, unit-linked insurance premiums are usually higher than traditional health insurance. Consequently, you must understand the differences between conventional and unit-linked health insurance and its benefits.
Lifepal, as an insurance platform, explains the differences and advantages of traditional and unit-linked health insurance according to Benny Fajarai, co-founder and CMO of Lifepal.co.id. Standard health insurance only offers health protection without an investment component, while unit-linked health insurance provides health protection and investment benefits.
Here are some types of traditional health insurance to choose from:
- Individual health insurance covers individual health care costs, not family members or other parties.
- Family health insurance covers the entire family’s health care cost.
- Islamic health insurance: This insurance complies with Islamic principles for those who avoid usury.
Here are some of the benefits of traditional health insurance:
- Offers more excellent benefits: Traditional health insurance policies provide more significant benefits than unit-linked health insurance with lower premiums.
- More affordable premium fees: Traditional health insurance offers cheaper premium fees because there are no investment fees or other costs charged to customers.
- No risk of loss: Traditional health insurance has no chance of failure because it does not involve an investment. This is different from unit-linked health insurance, which has an investment risk.
- By understanding these differences, you can choose the type of health insurance that suits your needs and preferences.
OJK Permits Lower Electric Vehicle Insurance. This Says, Observers
Rules regarding electric vehicle insurance, which charge lower rates than conventional vehicles, are considered not by the principles of insurance and risk management.
According to insurance observer Irvan Rahardjo, this is caused by the limited number of electric cars, so they do not fulfill the basic concept of insurance, namely the law of large numbers.
“Ivran explained that the risk of electric cars is much higher than fuel-fueled cars. The potential total loss for electric cars is far greater than conventional cars, which can still be repaired,” he told Kontan.co.id on Tuesday (20/6).
Irvan also explained that apart from the small population of electric cars, there is no statistical data regarding losses or accidents that occur in electric vehicles. Therefore, this data cannot be used to set premium rates.
He also added that the Financial Services Authority (OJK) violated the insurance rate rules set to support the government’s policy of providing subsidies to electric vehicles.
“OJK set a bad precedent for industry players by violating tariffs that should be followed by all related parties, both industry players and regulators,” he explained.
Irvan stated that the electric vehicle insurance rate scheme must still refer to the motor vehicle insurance rates stipulated in POJK No. 2/POJK.05/2015 junto SEOJK No.6/SEOJK.05/2017 concerning stipulating Premium Rates in the Property and Motor Vehicle Insurance Business Line.
“Instead, OJK should review rates that have been in effect for six years, but instead lowered premium rates, especially for motorized vehicles. This shows OJK’s insensitivity to insurance business practices,” he said.
Previously, OJK Non-Bank Financial Industry Supervision (IKNB) Chief Executive, Ogi Prastomiyono, said that the rules regarding electric car insurance still refer to the provisions that apply in the insurance industry.
“To encourage government policies regarding electric cars, OJK has issued a letter to industry players,” said Ogi.
He added that the letter given to the insurance industry players gave them the flexibility to apply lower insurance rates.
“In essence, it provides an opportunity for insurance companies to implement electric vehicle insurance rates at a lower level,” he said.
LPS Will Guarantee the Policy, Insurance Customers Are Safer?
Jakarta – The Deposit Insurance Agency (LPS) will get a new assignment as the Policy Guarantee Program (PPP) implementer. This is regulated in Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (UU P2SK).
The Chairman of the LPS Board of Commissioners, Purbaya Yudhi Sadewa, stated that the P2SK Law would strengthen the institutional aspects of financial supervisory authorities in Indonesia, including strengthening coordination between the Ministry of Finance, Bank Indonesia, the Financial Services Authority (OJK), and LPS which are members of the Financial System Stability Committee (KPK). KSSK).
Purbaya also said that the P2SK Law was a milestone in financial sector reform in Indonesia. “This law will answer several challenges that are still being faced by the financial sector, such as financial literacy, unequal access to finance, protection of investors and consumers, and coordination in dealing with financial system stability. Implementation of the P2SK Law is highly urgent,” said Purbaya on Wednesday ( 21/6/2023).
Purbaya added that LPS welcomed the changes contained in the P2SK Law, including the new mandate given to LPS. LPS is fully committed to preparing itself as best as possible to carry out this new mandate.
The Chief Executive of LPS, Lana Soelistianingsih, explained that arrangements for the P2SK Law had been made since changes to Law no. 24/2004 concerning LPS. These changes include an institutional structure that is in line with the Board of Commissioners (DK), the duties of the DK, the establishment of the LPS Supervision Body, and the election of members of the Board of Commissioners by the DPR at the suggestion of the President.
Lana also mentioned that there was strengthening and addition of LPS authority, including bank and insurance company audits, placement of funds in Banks Under Restructuring (BDP), implementation of the Policy Guarantee Program (PPP), as well as exceptions to certain LPS powers from the Limited Liability Company Law, the Banking Law, and the Market Law. Capital. According to Lana, this law will significantly influence and adjust the vision and mission and strengthen human resources.
“Our focus will also involve regulation, infrastructure, and IT systems as part of the transformation during the transition period, as well as maintaining flexibility for the next five years,” he added.
LPS functions based on the P2SK Law are guaranteeing deposits and policies, playing an active role in maintaining financial system stability, carrying out bank resolutions, and liquidating insurance companies.
“We continue to strive to increase customer and public awareness,” explained Lana.
Member of the LPS Board of Commissioners, Didik Madiyono, also gave his views on Bank Resolutions, especially in handling and settling banks according to the P2SK Law. Didik explained that the bank would follow a resolution plan that each bank had to make.
Banks that do not yet have a resolution plan will be given socialization to compile it. Didik explained that preventive measures against bank failures are better than cures if such failures occur. Therefore, the approach taken is an effort to maintain the bank’s health.
With the existence of the P2SK Law, the financial sector can experience significant positive changes. Through strengthening coordination between related institutions, increasing protection for investors and consumers, as well as efforts to maintain financial system stability, the financial sector in Indonesia will become more robust and more reliable.
LPS as the implementer of the Policy Guarantee Program (PPP) will carry out its new duties with full commitment and is ready to carry out its mandate.
Source: https://finance.detik.com/moneter/d-6784524/lps-bakal-jamin-polis-nasabah-asuransi-lebih-aman.
OJK Will Supervise Insurance Investment in the Capital Market, What’s Up?
The Financial Services Authority (OJK) will oversee the movement of insurance investment funds, which are mostly allocated in the capital market.
The Chief Executive of OJK’s Insurance, Underwriting, and Pension Fund Supervision, Ogi Prastomiyono, explained that so far, insurance supervisors have not been able to directly monitor insurance fund portfolio transactions, both in the stock market and in the negotiated market, including the amount of the price.
OJK has found that investment transactions from insurance companies are carried out with affiliated companies. The OJK will tighten restrictions regarding parties involved in insurance fund transactions to overcome this. This aims to ensure better products can be obtained.
Ogi said that this is a challenge in the national insurance industry. In addition, there are other challenges faced by industry players, such as weaknesses in capital, the implementation of good corporate governance (GCG), risk management, and the need for more support from technical experts (technical expertise).
OJK found that the support of technical experts, such as actuaries or appointed actuaries, still needs to be improved in many insurance companies. According to Ogi, from OJK monitoring, 50 insurance companies do not have an appointed actuary, even though this is required by Law 40 of 2014.
Therefore, OJK has given written instructions to these companies to fill appointed actuary positions immediately. OJK will also sanction companies that do not comply with these provisions.
Another challenge faced in the insurance sector is the low level of insurance literacy and weaknesses in consumer protection.
Many people need help understanding the insurance products they buy, especially investment-linked (PAYDI) or unit-linked insurance products, which offer protective and investment components. Consumers often do not realize that if there is a risk of impairment in the value of their investment, they will be responsible for the loss.
OJK has issued OJK Circular Letter (SEOJK) Number 5 of 2022, which regulates PAYDI products. Insurance companies must adapt their PAYDI products to these provisions to protect consumer interests.
BCA (BBCA) Opens Voices Regarding the Entry of Strategic Partners at BCA Life
PT Bank Central Asia Tbk. (BBCA) According to a Reuters report citing two reliable sources, it is exploring strategic options, including the possibility of selling shares of its subsidiary, PT Asuransi Jiwa BCA (BCA Life).
BBCA is working with advisors to conduct a strategy review at BCA Life. Several options are being considered, including establishing a joint venture with a foreign partner or a bancassurance partnership.
Under the partnership, insurance companies can sell their products and services through bank branches within a certain period. Hera F. Haryn, Executive Vice President (EVP) of BCA’s Corporate Communication & Social Responsibility, revealed that BCA is not actively exploring investment options from strategic partners. However, BCA and its subsidiaries remain open to collaborating with strategic partners.
This effort was made to expand the service ecosystem to customers and support business growth. Hera expressed the commitment of BCA and its subsidiaries to provide quality services to customers with various needs, including BCA Life which offers life insurance solutions. He also noted that BCA Life, as a subsidiary of BCA in the life insurance segment, has recorded a solid performance and a growing customer base that continues to increase.
In the first quarter of 2023, BCA Life recorded a net profit of IDR 889 million, an increase of 106.36 percent compared to the previous year.
This growth was driven by a net premium income of IDR 329.53 billion, which increased by 8.97 percent annually. BCA Life’s total assets also grew by 22.85 percent to IDR 2.7 trillion in the first quarter of 2023 compared to IDR 2.2 trillion in the first quarter of 2022.
This information is presented by L&G Insurance Broker – The Smart Insurance Broker.
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