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It has been almost two months since we have not published information and news about the development of Indonesian insurance.
We realize that as a blog that focuses on the insurance industry, the information about the development of the insurance industry should be our priority.
As brokers and insurance consultants we need to stay updated with the development of the insurance industry, this is one of the “tasks” that we need to be done for the benefit of our clients and insurance partners.
As always, we have selected for you four headlines about insurance news from online media, mainly the media that are more focused and consistent in writing news about Indonesia’s insurance. The information is complete, accurate and comes from a trusted source. We use bisnis.com and kontan.com. If you want to get more detailed information, please download from these websites.
The topics are about coordination benefits (COB) between BPJS with private insurance companies. Credit insurance alarm, Indonesian insurance growth in 2021 and the victims of Unitlink products.
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Synergy Between Private Insurance with BPJS (Employees Social Security System)
Bisnis.com, JAKARTA, January 26, 2022
Indonesia’s Health Minister Budi Gunadi Sadikin will encourage synergy between BPJS with private insurance in the national health insurance program (JKN). The synergy will be done through the development of cost difference policies as one of the directions of JKN program development policy based on basic health needs (KDK).
The implementation of sharing and cost differences can be utilized by BPJS participants who want more benefits and convenience on top of basic health needs provided in KDK. Budi will revise the Regulation of the Minister of Health Number 51 of 2018 on Sharing Costs and Cost Differences in the Health Insurance Program.
“We will revise Permenkes 51/2018 on the difference in costs so that the combination of BPJS social insurance and private insurance can merge together, for peoples who pay BPJS and private insurance at the same time, their money is not lost,”
Budi said this in a working meeting with the House of Representatives, Tuesday (1/25/2022). “Maybe private insurance should pay less because some have been covered by BPJS or if it is not cheaper, yes, he gets a better service because the basic service has been covered by BPJS and we will regulate this mechanism,” he continued.
The arrangement of the difference and fee mechanism aims to streamline the payment of dues by JKN participants. According to Budi, during this time there is duplication of dues payments by BPJS participants who also had additional health insurance (AKT) from the private insurance sector.
With the mechanism of difference in cost, it is expected that BPJS participants who want to go to the hospital or need facilities on top of KDK, do not need to pay dues twice. “If it can be the portion of BPJS, it will be covered by BPJS, the rest if they want to take a better class then it will be automatically covered by private insurance without duplication of dues costs.
Currently while paying BPJS, participants also pay private insurance at the same time. Double cost. Later there will be no duplication of the cost because the coverage will be arranged so that we can synergize with each other, ” Budi said. For example, participants who are undergoing mild appendicitis surgery, according to standards, will be financed by BPJS of Rp7.3 million. However, if the person wants to level up the class to VIP so that the total bill becomes Rp14.59 million.
There is a difference in costs that can later be paid by private insurance. This cost difference depends on negotiations between private insurance companies and BPJS Kesehatan. If the amount of negotiation of the cost difference is agreed 100 percent, the difference in costs of Rp7.3 million will be paid by private insurance.
Credit Insurance Providers are Required to Review the Business Programs and Backup
Bisnis.com, JAKARTA – January 25, 2022
Reinsurance businesses encourage insurance companies who are issuing credit insurance policies to conduct a review of their business and its backups. This is in anticipation of future credit insurance claims, especially post-credit relaxation policies that are extended until 2023.
President Director of PT Reasuransi Nasional Indonesia or Nasional Re Dody Achmad Sudiyar Dalimunthe said, credit insurance plays an important role to support banks in dealing with potential bad credit risk after normalization of credit relaxation policies is enacted.
In addition to risk management carried out by banks, as an issuer of credit insurance policies, insurance companies must also mitigate by establishing the terms and conditions of the policy that suits risk and limit needs, as well as insurance guarantees.
Insurance companies must ensure the credit insurance premium rates set are equivalent to the risks covered and establish appropriate technical backups with actuarial calculations that show the dynamics of the business going forward. “Currently, credit insurance business line products show a high loss ratio figure, so if not managed properly it will be bad for the performance of insurance companies.
In line with this, the risk re-coverage session to the reassured also shows a bad figure as well. If at the deepest point it turns out that the credit insurance premiums received by insurers are not enough to pay its liability, then there will be uproar in the insurance industry and the banking industry.
This will have an impact on the continuity of economic activities of the community and the country in general,” Dody told Bisnis, Monday (1/24/2022). Thus, Dody assesses, credit insurance products need to be reviewed and put them in a more controllable position by putting forward the precautionary principle.
According to him, insurance companies, including reinsurance, need to have comprehensive discussions with the insured or creditors so that the principle of risk management can be applied properly in the credit process.
Dody said the reassured should also get access to data to monitor risk profiles. Thus, the insured and the insurer will have the same risk appetite to maintain a good risk profile.
“The reassured will fully support a review of the credit insurance business process; at the same time the government also extends the relaxation of credit. For this reason, it is also necessary to be the concern of all parties so that banking and insurance activities can be carried out with the principles of good risk management and governance,” he said.
Similarly, Benny Waworuntu, President Director of PT Reasuransi Indonesia Utama (Persero) or Indonesia Re, said coordination with other reinsurance companies will consolidate with insurance companies to minimize the impact of credit risk.
According to him, in recent years, the credit insurance business has been shocking the industry so that it requires risk mitigation, ranging from a comprehensive review of the terms and conditions of policies, setting premium rates, to backups from companies.
“The insurance companies themselves have to consolidate with banking and multifinance, with us [reinsurance] as well. I think we must sit down together to see this comprehensively because we see this as a serious problem. The problem where it has not been able to mitigate risks properly, backups, recording, management may not be correct. But positively, the business is there and big.
Moreover, the government through banking to encourage the real sector must intensify with credit disbursement. We have to work ourselves to be able to protect this properly,” Benny told Bisnis. He considered the discipline of the insurance company’s backup and reinsurance are also important. Indonesia Re which also has a credit insurance portfolio will focus on readiness for large potential claims in the future.
“In the future we really want to create the reserves, our focus even though it is profit and loss we are a bit disturbed because we have to put a fairly large reserve. It’s better that if it will be that profits will go up, but when there are massive claims, we hit even deeper,” he said.
Life Insurance Premiums Grow 7.21 Percent in 2021, General Insurance Even Correction
Bisnis.com, JAKARTA – (1/24/2022),
The Financial Services Authority (OJK) noted that the collection of life insurance premiums grew positively throughout 2021, while the performance of the general insurance and reinsurance industry was still corrected.
Based on its publication on Monday (1/24/2022), OJK reported premiums collected by the life insurance industry reached Rp184.32 trillion throughout 2021. This realization grew 7.21 percent compared to the realization in the previous year of Rp171.93 trillion.
Meanwhile, OJK noted that the collection of general insurance and reinsurance industry premiums only reached Rp100.1 trillion throughout 2021. This achievement increased by 3.76 percent compared to the achievement in 2020 which reached Rp104.1 trillion.
In terms of capital, both insurance industries have a solid solvency ratio. RBC’s life insurance and general insurance industries are both above threshold, well above the 120 percent threshold. OJK noted that risk-based capital (RBC) of the life insurance industry in 2021 was at the level of 539.8 percent, higher than the position in 2020 which reached 528.6 percent.
For the general insurance industry, RBC is at the level of 327.3 percent in 2021. RBC so far last year was below the position in 2020 which reached 343.5 percent.
Meanwhile, OJK projects the assets of life insurance companies as well as the assets of general insurance and reinsurance companies to grow by 4.66 percent and 3.14 percent respectively in 2022. Previously, Chairman of the Board of Commissioners of OJK Wimboh Santoso said his party will continue to improve regulations in the insurance sector to improve the governance of the industry. Wimboh said, as the insurance industry grows, OJK needs to reform insurance industry policies, and this has been done since 2017.
The improvements are carried out gradually, ranging from risk management, corporate governance, distribution of insurance products, to investment-related arrangements. “We are dealing with it in its entirety and some of what we have done, among them, we have banned guarantee returns and there has to be a transition period.
In addition, mark-to-market must also be done. The rules of prudence, liquidity, we will continue to improve,” Wimboh said in a press conference of the 2022 Financial Services Industry Annual Meeting, Thursday (1/20/2022). According to him, currently, there are several new provisions for the insurance industry that are already in the OJK policy plan. These provisions will be issued gradually. “There will be a lot in the pipeline, but we continue to perfect it, we don’t have to spend it together,” he said.
Community of Victims of Insurance Unit Link Plans to Complain to the President
KONTAN.CO.ID – JAKARTA. K Saturday, January 22, 2022
The Community of Victims of Insurance Unit Link Prudential, AIA and AXA Mandiri hope to convey the issue to President Joko Widodo. This was confirmed by the coordinator of the Unitlink Insurance Victims Community, Maria Trihartati.
“I will stay in Jakarta until I can meet the president, Mr. Jokowi,” Maria said in a statement on Saturday (1/22/2022).
Maria who is a housewife and food trader from Lampung claimed Jokowi’s support is needed. Based on complaints from hundreds of victims from all over Indonesia, Maria admitted, most of them are those who are economically unfit to be suspected to follow unit link insurance.
This insurance product, she said, is too much component of the cost charged to the owners.
“That is why in developed countries such as In Europe, this unitlink product is already closed. It is for this reason that we want President Jokowi to hear it directly from us victims, not from OJK let alone insurance companies,” he said.
So far, Maria said, it has struggled to request a full refund. Unfortunately, of the three insurance companies that sell unit link products are still reluctant.
She also deeply regretted the attitude of the Financial Services Authority (OJK) which she considered not to be maximally defending the interests of the people who were victims of unit link.
“This issue we want to convey also to Mr. President Jokowi. We hope that Jokowi’s attention and partisanship so far to the small people can be realized also by giving us the opportunity to meet,” said the mother of three children.
A week ago, the Unit Link Insurance Victim Community visited the head office of OJK.
In addition, the community consisting of hundreds of victims also submitted complaints to the Indonesian Ombudsman and was directly requested by Commission XI of the House of Representatives to attend the Public Hearing Meeting (RDPU) at the House of Representatives building.
This information is provided by L&G Insurance Broker, A Smart Insurance Broker.
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