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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Zurich Syariah CEO Reveals Weather Insurance Business Opportunities: How is the Underwriting Process?
PT Zurich General Takaful Indonesia (Zurich Syariah) has revealed significant business potential through a Sharia weather index parametric insurance product aimed at coffee farmers. Hilman Simanjuntak, President Director of Zurich Syariah, explained that this product has up-and-coming prospects, especially since this is the first time Indonesia has special parametric sharia insurance for coffee farmers.
This year, Zurich Syariah aims to protect a Sharia weather index parametric insurance product for 3,000 farmers. Hilman explained that the potential for this market is enormous, especially considering the number of farmers in Aceh and throughout Indonesia who produce coffee.
Regarding the underwriting process, Hilman stated that Indonesia has a high average rainfall and is also the largest coffee producer in the world. Therefore, coffee farmers are vulnerable to extreme weather risks. However, this product also has its risks due to uncontrollable natural conditions. This risk will be reflected in the size of the insurance premium, which may vary depending on the area and extreme weather conditions.
Despite the risks, Zurich Syariah has developed a solution with Blue Marble Microinsurance that can assess and identify weather parameters, including rainfall. This allows the sharia weather index parametric insurance product to protect coffee farmers.
Auralusia Rimadiana, Chief Sales and Distribution Officer of Zurich Syariah explained that rainfall significantly impacts coffee yields. For example, satellites have identified high rainfall in the Bener Meriah region from October to December 2022. Over 200 farmers affected by this extreme weather have benefited from the Sharia weather index parametric insurance.
Claims will be processed based on satellite data monitored by Blue Marble Microinsurance, the developer of this parametric insurance product. Thus, claim payments can be made quickly according to monitored weather conditions without going through complicated administrative processes.
Zurich Syariah plans to expand the Sharia weather index parametric insurance coverage to the Tanggamus area, Lampung, in the third quarter of 2023. This company will also add other commodities that will get protection through this product. Thus, Zurich Syariah will continue to try to expand the Sharia weather index parametric insurance protection for coffee farmers and other agricultural and plantation commodities.
11 Troubled Insurance Companies, Kresna Life and Wanaartha Life Lost Operating Permits
Cases of Problems in the Indonesian Insurance Industry Continue to be Supervised by OJK, 11 Companies Are Under Special Attention.
The Financial Services Authority (OJK) noted that 11 insurance companies are currently experiencing problems and are under special supervision. Two of them have had their permits revoked. They are being liquidated: PT Asuransi Jiwa Kresna (Kresna Life) and PT Asuransi Jiwa Adisarana Wanaartha (Wanaartha Life/WAL).
OJK’s Chief Executive for Insurance, Underwriting, and Pension Fund Supervision, Ogi Prastomiyono, revealed that four insurance companies had submitted financial restructuring plans (RPK) and OJK had approved these plans. Meanwhile, five other companies that have not raised their RPK are still being monitored.
OJK still needs to take action to revoke business licenses for companies that still need to submit RPK because there is still an ongoing process, including warning letters to these companies.
Furthermore, OJK has also rejected the liquidation team’s proposal submitted by Kresna Life. This happened after OJK received a decision from the General Meeting of Shareholders (GMS) regarding the disbandment and formation of the Kresna Life liquidation team last June. OJK has five days to respond to the proposal and has submitted a letter to Kresna Life stating that the process for forming the liquidation team still needs to comply with the applicable regulations.
OJK hopes that Kresna Life will immediately submit prospective members of the liquidation team by applicable regulations. After the group is formed, the following process will involve OJK and all Kresna Life shareholders in liquidation.
Meanwhile, Wanaartha Life is being liquidated after its business license was revoked and a liquidation team was formed. OJK noted that 12,577 policyholders submitted bills to the Wanaartha Life liquidation team, and the liquidation team is currently verifying supporting documents related to these bills.
OJK has also approved the liquidation team’s spending work plan (RKAB), which targets the completion of liquidation within two years until the end of 2024. OJK has also appealed to all related parties to support the liquidation settlement by prioritizing the interests of policyholders.
Life and Accident Insurance for Pilgrims 2023 Has Disbursed. Families Can Check
The Ministry of Religion Has Announced the End of Hajj Operations for 1444 H/2023 M. Based on information from Kemenag.go.id, the number of pilgrims who have died has reached 700 people in this year’s Hajj season.
The Ministry of Religion Has Provided Protection Through Life Insurance for Indonesian Hajj Pilgrims Who Passed Away. In addition, insurance is also provided for pilgrims who experience accidents.
Saiful Mujab, Director of Domestic Hajj Services and Head of the Central Hajj Organizing Officer (PPIH) 1444 H/2023 M stated that this year’s Hajj Pilgrimage Insurance has begun to be disbursed in stages. Families of Hajj Pilgrims Can Check Accounts When the Deceased/Deceased Pays Hajj Fees.
“So far, insurance costs have been transferred to 301 congregation accounts,” explained Saiful Mujab in Jakarta Monday (7/8/2023).
“So, the disbursement goes directly to the congregation’s account used when paying off the Hajj fees at BPS Bipih before they leave,” he added.
Data from the Ministry of Religion’s Integrated Hajj Information and Computerization System (Siskohat) shows that 775 pilgrims have died this year. The Directorate General of Hajj and Umrah Pilgrimage is Performing Data Verification.
“Another amount is in the process of verification and will be paid soon,” said Saiful Mujab.
Furthermore, Saiful Mujab added that insurance claims are entirely handled by the Directorate of Domestic Hajj Services, Directorate General of Hajj and Umrah Organisation. The Required Requirements Include a Date Certificate (Certificate of Date/COD) and a Death Certificate (SKK) for pilgrims that Siskohat has verified.
“The congregation’s family does not need to do anything. It is enough to confirm with the bank that received the deposit from the deceased whether the insurance claim funds have been transferred or not,” said Saiful.
Following are the Provisions of Life and Accident Insurance for Indonesian Hajj Pilgrims 1444 H:
- Pilgrims who die are given insurance for at least the amount of the cost of the pilgrimage trip (bipih) per embarkation
- Congregants Who Die As a Result of Accidents Are Given Double Bipih per Embarkation
- Pilgrims who have an accident and experience permanent disability will receive compensation with varying amounts from 2.5% to 100% per embarkation
- Insurance arrangements are carried out by the Directorate General of Hajj and Umrah Management. The insurance company will pay claims via transfer to the congregation’s account.
- Insurance Protects Pilgrims From Entering the Hajj Embarkation Dormitory to Returning to the Hajj Debarkation.
Asuransi Astra Successfully Earned a Profit of 7.73% in Semester I 2023
PT Asuransi Astra Buana has reported positive performance in the first half of 2023. This can be seen from the profit growth of 7.73% year on year (YoY).
Based on the financial report, Asuransi Astra achieved a profit of IDR 660.2 billion in the first half of 2023. During the same period last year, Asuransi Astra recorded a profit of IDR 612.84 billion.
Asuransi Astra’s total revenue increased by 17.10% YoY to IDR 2.1 trillion in June 2023. Meanwhile, Astra Insurance recorded a premium income of 23.83% YoY to IDR 3.58 trillion in the first half of 2023.
President Director Asuransi Astra, Christopher Pangestu, stated that the increase in premium income was supported by three business lines: automotive, commercial, and health.
“In 2022, the gross premium will be IDR 5.67 trillion. Our target this year is IDR 6.23 trillion. Profits should grow from the previous year,” he said on Monday (7/8).
Christopher revealed that in 2022, Asuransi Astra made a profit of IDR 1.2 trillion. This year, Asuransi Astra targets a profit of around Rp 1.3 trillion.
“Probably around Rp 1.3 trillion this year. The supporting business lines will remain three until the end of the year, namely motor vehicles, commercial, and health,” he added.
Furthermore, Asuransi Astra recorded a gross claim of 9.49% YoY to IDR 1.48 trillion in the first half of 2023, compared to the same period the previous year of IDR 1.35 trillion.
In addition, Astra Insurance’s total investment reached IDR 13.56 trillion in the first half of 2023, up 8.16% YoY compared to the first half of 2022 of IDR 1.25 trillion.
However, Asuransi Astra’s investment results have experienced a slight correction of 1.98% YoY to IDR 418.29 billion in the first half of 2023, compared to the same period the previous year of IDR 426.72 billion.
Asuransi Astra increased its asset value by 8.84% during the year (YtD) to IDR 3.35 trillion in June 2023, compared to December 2022 of IDR 3.07 trillion.
Asuransi Astra’s equity also increased to IDR 7.11 trillion, growing 3.8% YtD in June 2023, compared to the end of the previous year of IDR 6.85 trillion. Asuransi Astra’s liabilities also increased by 11.81% YTD to IDR 9.8 trillion in June 2023, compared to December 2022 of IDR 8.76 trillion.
Source: https://keuangan.kontan.co.id/news/laba-asuransi-astra-tumbuh-773-di-semester-i-2023
Insurance Companies in Indonesia are Still Very Interested in Foreign Investors
The Financial Services Authority (OJK) revealed lingering interest from foreign parties in the insurance industry. Even so, several factors hinder their interest in reinsurance in Indonesia.
General Chairman of the General Insurance Association of Indonesia (AAUI), Budi Herawan, expressed the same thing separately. He explained that the reinsurance industry is currently facing a complex market condition known as the ‘hardening market,’ in which the global insurance and reinsurance industry experiences a significant increase in claims, affecting profitability.
Budi also indicated that the difficulty for the reinsurance industry in building its capacity was one of the obstacles. Thus, many foreign investors would prefer to avoid getting involved in the reinsurance business in Indonesia.
“Yesterday, it was also stated that there were no foreign investors interested in investing their capital in the reinsurance sector,” Budi told journalists at the Insurance HR Development Center, Central Jakarta, on Wednesday (2/8/2023).
In this regard, the Chief Executive of the Supervision of Insurance, Underwriting, and Pension Funds of the OJK, Ogi Prastomiyono, explained that there is interest from foreign investors in reinsurance. However, they were hit by restrictions on full ownership.
“There is interest from foreign investors in reinsurance companies, but the obstacle is related to ownership limits of up to 100%,” said Ogi in his written response at the OJK Board of Commissioners Meeting (RDK) on Monday (7/8/2023).
Even though there are obstacles in the interest of foreign investors in reinsurance, the amount of investment aimed at the insurance sector in Indonesia remains high.
“This can be seen from the two insurance companies acquired by foreign investors in 2022,” said Ogi.
Ogi also considers that insurance companies that attract foreign investors generally have strong business potential, significant market share, and solid risk management and governance.
If we reflect on the past, one of the players in the insurance industry, PT Asuransi Bina Dana Arta Tbk (ABDA), was successfully acquired by a foreign party last year.
An insurance company from Singapore, Aseana Insurance Pte Ltd, officially took control of the general insurance company with an investment of US$ 59.5 million.
Aseana acquired shares previously owned by MAPFRE Internacional SA, namely 386,924,893, on August 31, 2022. This is equivalent to 62.33% of the total shares issued by ABDA.
Recently, the second largest insurance company from Korea, Hanwha Life, also acquired most of PT Lippo General Insurance Tbk (LPGI) shares. With this step, Hanwha is now the main shareholder of LPGI, with a share portion of 62.59%.
It is known that Lippo Insurance will have total assets of IDR 2.93 trillion by 2022. This general insurance company, which was founded in 1963, was previously owned by PT Inti Anugerah Pratama (PT IAP) and PT Star Pacific Tbk (LPLI).
LPS Gains New Authority in the P2SK Law and Guarantees Insurance Policies
The Deposit Insurance Corporation (LPS) has received new powers in line with the ratification of the Financial System Development and Strengthening Law (UU P2SK).
In accordance with what is stated in the P2SK Law, LPS has a role in regulating Bank Guarantees and Resolutions and involving Institutional and Authority Expansion, Policy Guarantee Programs (insurance), and Placement of Funds.
Hermawan Wibowo, Acting Head of the Preparatory Office for the Implementation of the Banking Restructuring Program (PRP) and LPS Institutional Relations, revealed that in the context of bank guarantees and resolutions by the P2SK Law, LPS has been given new instruments to address bank problems.
“These instruments include liquidation or resolution methods through the sale of assets owned by the Bank in Resolution (BDR) to settle the obligations owned by the bank. In addition, there are also Temporary Equity Investments (PMS) which involve providing additional capital to BDR to save,” said Hermawan Wibowo at the LPS Media Gathering 2023 event, which was attended by media people from the Joglosemar area in Yogyakarta on Friday (4/8/2023).
Furthermore, another resolution is Purchase and Assumption, which is the transfer of part or all of the assets and liabilities of the BDR to the receiving bank. And finally, there is a temporary transfer option through the Bridge Bank method, in which part or all of the BDR’s assets and liabilities are transferred to an Intermediary Bank or a bank established by LPS.
Hermawan Wibowo explained, “These various methods are options taken by LPS to handle or resolve bank problems that cannot be resolved by the relevant authorities and are handed over to LPS.”
Dimas Yuliharto, Secretary of the LPS Institute, discussed the current challenges in the financial sector, such as the lack of financial literacy and unequal access to financial services that all levels of society can access. What’s more, technological disruption is growing.
“Therefore, continuous efforts are needed to increase financial literacy and access to financial services. We appreciate the contribution of media people in increasing financial literacy in society,” said Dimas.
“We also appreciate the collaboration with media people, especially through activities like this. Thanks to all colleagues,” added Dimas.
LPS remains focused on supporting economic recovery and building public trust in banks through guarantees and resolutions. LPS also seeks to increase a general understanding of the duties and roles of LPS in bank guarantees and solutions. Thus, IDIC plays an active role in supporting economic recovery and maintaining the stability of the state financial system.
Source: https://www.krjogja.com/ekonomi/read/514910/sah-lps-kini-jamin-polis-asuransi
OJK and the Indonesian Insurance Association Together Create a 2023-2027 Development Roadmap
The Financial Services Authority (OJK), together with several insurance associations such as the Indonesian General Insurance Association (AAUI), the Indonesian Life Insurance Association (AAJI), the Indonesian Sharia Insurance Association (AASI), the Association of Indonesian Insurance and Reinsurance Brokerage Companies (Apparindo), and the Appraiser Association Indonesian Insurance Losses (APKAI) have jointly designed a roadmap for developing the insurance sector in Indonesia from 2023 to 2027.
AAUI Executive Director, Bern Dwyanto, explained that this roadmap aims to provide a shared vision to the insurance industry in Indonesia to advance this sector. The 2023-2027 roadmap’s main objective is to accelerate the insurance industry’s growth, which has shown growth every year.
Based on the results of an OJK survey regarding the insurance industry in 2023, most companies in this industry have a relatively small business scale, both in the general and life insurance industries. As many as 69.2% of life insurance companies (36 out of 52 companies) and 62.5% of public insurance companies (45 out of 72 companies) only contribute less than 20% of the total premium/industry contribution.
Therefore, this roadmap is expected to strengthen corporate capacity and consolidation in the insurance industry.
Bern also emphasized that in preparing this roadmap, various views from various stakeholders have been invited and considered. This is a significant consideration in determining strategic policies in the Indonesian insurance roadmap for 2023-2027.
“This step was taken to gain insight from industry players regarding the policy directions for developing the insurance industry,” Bern told Kontan on Monday (7/8).
AAUI, as one of the associations involved, also noted that many of the inputs that have been provided have been incorporated into the roadmap. These inputs cover various matters, such as the use of digital technology, the development of disaster insurance products, and the development of life insurance products.
“In the roadmap, there are about 45 topics that we have conveyed,” added Bern.
Input from various associations is then aligned with the Law on Development and Strengthening of the Financial System (P2SK) and the existing Indonesian National Work Competency Standards (SKKNI).
“This step was taken to ensure that the development of the insurance industry is in line with the mandate to create a healthy financial industry,” concluded Bern.
This information is provided by: L&G Insurance Broker – The Smart Insurance Broker.
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