Liga Asuransi – Hello risk takers, in the third week of March 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.
Settlement of Extraordinary Claims, Tugu Insurance Pays IDR 286.72 billion for the Explosion at the Pupuk Kaltim Factory
Insurance company PT Asuransi Tugu Pratama Indonesia Tbk (Tugu Insurance) has completed a claim payment worth US$ 19 million or the equivalent of Rp. 286.72 billion related to the explosion at the steam methane reforming (SMR) unit of Factory V belonging to PT Pupuk Kalimantan Timur. Tugu Insurance acts as part of the insurance consortium in handling these claims.
Through a thorough investigation process in accordance with established procedures, it was concluded that the explosion incident on July 23 2022 was caused by damage which caused one of the instruments in the Factory V SMR unit to malfunction.
Payment of claims for losses experienced by PT Pupuk Kaltim, part of the Pupuk Indonesia Group, has been fully resolved. The first payment of US$ 3.96 million was made on February 21 2023, while the final payment of US$ 15.15 million was made on January 4 2024. This claim settlement ceremony was held in Bali and attended by various important parties, including representatives from Tugu Insurance , director of Pupuk Indonesia, and directors and financial representatives of Pupuk Kaltim.
Ery Widiatmoko, Tugu Insurance’s insurance marketing director, explained that as Consortium Leader, Tugu Insurance has a big responsibility to complete 100% claim payments from the consortium’s share, without waiting for contributions from other consortium members or from reinsurance.
“We carry out this responsibility well, supported by our financial strength, with the main aim of maintaining Pupuk Indonesia Group’s trust in the credibility of Tugu Insurance as a Consortium Leader with an ownership portion of 45%,” said Ery in an official statement delivered on Thursday, March 14 2024.
The composition of ownership in the consortium is Tugu Insurance as Leader with an ownership portion of 45%, followed by BRI Insurance (32.5%), PT Asuransi Ramayana Tbk (20%), PT Asuransi Ekspor Indonesia (2%), and PT Asuransi Mitralindung Mustika (0.5%).
Sun Life Indonesia and CIMB Niaga Release X-Tra Self Protection Sharia Insurance for CIMB Niaga Customers
Sun Life Financial Indonesia (Sun Life Indonesia) and PT Bank CIMB Niaga Tbk (CIMB Niaga) have introduced a traditional sharia-based insurance product called X-Tra Proteksi Diri (Xpresi), which is aimed specifically at CIMB Niaga customers. Danning Wikanti, Chief Distribution Officer & Sharia Director of Sun Life Indonesia, believes that this insurance product will provide financial benefits and peace of mind for customers and their families.
According to Danning, this product offers unique additional benefits, such as additional protection in the event of death during the month of Ramadan or during the Hajj pilgrimage, as well as death compensation of IDR 10 million. This insurance product also has superior features, including an easy and fast purchase process without the need for a medical examination, as well as end-of-contract benefits that provide long-term financial security for families.
“This product has affordable contributions starting from IDR 10,000 per day, so customers can choose a protection package according to their financial capabilities without sacrificing financial stability,” explained Danning.
Danning also added that this product provides insurance benefits of more than 220 times the annual contribution in special situations, such as the risk of death during the holy month of Ramadan or during the Hajj pilgrimage.
Ariteguh Arief, Head of Preferred, Wealth & Insurance Business at CIMB Niaga, welcomed the presence of the Xpresi insurance product, which will add to the portfolio of protection solutions available at CIMB Niaga. According to him, this product answers the high needs of customers who need traditional insurance products.
“This is our commitment to continue to improve services and provide added value to the community,” added Ariteguh.
Unitlink product growth is predicted to be 5% in 2024, this is a positive response from AAJI
The Financial Services Authority (OJK) estimates that growth in investment-linked insurance, known as Paydi or unitlink, is projected to reach around 5% in 2024.
The Indonesian Life Insurance Association (AAJI) welcomes the unitlink growth projection for 2024.
AAJI Executive Director, Togar Pasaribu, expressed optimism that this target could be achieved. Even though the 2023 full year report shows a decline in unitlink products, public interest remains high.
“We project an increase in overall life insurance premiums this year of between 7% and 10%,” he told Kontan on Wednesday (13/3).
Togar also said that Paydi’s resale after adjustments to the latest regulations would have a positive impact.
OJK revealed that the strength of the Composite Stock Price Index (IHSG) will influence people’s decisions in investing their funds through unitlink insurance products.
Life insurance companies also expressed a positive view of the growth of unitlink products this year. For example, PT BNI Life Insurance recorded growth of around 5% this year.
PT Asuransi Jiwa Generali Indonesia (Generali Indonesia) expressed confidence that unitlink will still develop and have its own market segment. Vivin Arbianti Gautama, Chief Marketing Officer of Generali Indonesia, highlighted the large market share in Indonesia that requires various protection products.
Generali Indonesia offers products that suit the financial needs of each segment of society. They are also optimistic about post-election economic stability which will increase public interest in unitlink insurance products.
On the other hand, PT MSIG Life Insurance Indonesia Tbk (MSIG Life) estimates that unitlink growth will not dominate as before. This is due to the complexity of the unitlink purchasing process compared to traditional products.
Lukman Auliadi, Head of Customer and Marketing MSIG Life, explained that unitlink is aimed at the upper middle segment who have good financial and investment understanding.
The company’s traditional products are evolving in 2023 due to changing market trends and regulatory adjustments.
The company’s strategy includes regulatory adaptation and product innovation to remain relevant and competitive. They also focused on improving customer service and sales capacity.
OJK notes that this year’s unitlink growth projection is in line with total premium growth, with around 34% of life insurance premiums coming from unitlink premiums. Even though unitlink premiums have decreased, traditional product premiums will increase by 9.5% on an annual basis in 2023.
OJK Records Positive Growth in Insurance Industry in Early 2024, Assets Increase 3.8% YoY
The Financial Services Authority (OJK) recorded encouraging developments in the insurance industry in early 2024.
Chief Executive of the OJK Insurance Guarantee and Pension Fund Supervision, Ogi Prastomiyono, noted an increase in insurance industry assets of 3.8% on an annual basis to IDR 903.07 trillion in January 2024. In the same period the previous year, insurance industry assets were at IDR 869 trillion. .45 trillion.
Ogi stated, “We saw an increase in insurance industry assets at the beginning of this year.”
Apart from that, Ogi also highlighted the increase in life insurance industry premiums, which grew by 8.24% on an annual basis to IDR 17.34 trillion in January 2024. This figure increased compared to the same period in the previous year, where life insurance premiums were recorded at IDR 16.02 trillion. According to Ogi, this growth marks a positive start for the life insurance industry, after previously experiencing a decline.
“This is a good first step, previously in December 2023 there was a decline of 7.99%,” said Ogi.
Meanwhile, in the general insurance and reinsurance industry, Ogi also recorded growth in premium income in January 2024 reaching IDR 18.91 trillion, an increase of 30.09% compared to the same period in the previous year which reached IDR 14.53 trillion.
“The general insurance and reinsurance industry experienced premium income growth of 30.09% at the beginning of this year,” he added.
Ogi explained that growth in the insurance industry was driven by healthy financial conditions in insurance companies, with RBC (Risk-Based Capital) levels above the minimum limit. Even though there has been a decrease in life insurance RBC, it is still within safe limits.
“Even though there has been a decline, the RBC level for life insurance is still within safe limits,” explained Ogi.
Meanwhile, the RBC level of the general insurance and reinsurance industry in January 2024 remained maintained at 344.32%, an increase from the same period in the previous year which was at 319.51%.
Characteristics of Troubled Insurance Companies to Watch Out for
Insurance is an important form of protection that every individual must have. Its function is to avoid the impact of losses that can arise suddenly. However, in choosing an insurance company, trust and credibility are very important.
However, what if the insurance fails to provide the promised protection? This could be caused by the insurance company having problems. Even though premiums are regularly paid, when a claim is submitted, no guarantee of protection is provided. Of course this is very detrimental. To avoid this, pay attention to the following characteristics of problematic insurance companies.
- Not registered with OJK
- Too Cheap Premiums
- Less Protection
- Bad Company Reputation
- Difficult Claims Process
- Incompetent HR or Agents
- RBC Ratio Below 120 Percent
- Obscure Marketing Office
When choosing an insurance company, make sure to always be careful and pay attention to these characteristics to avoid losses in the future.
If you identify problematic characteristics of an insurance company when choosing, it is advisable to avoid that company. However, if you are already experiencing problems with the insurance company, it is better to immediately switch to an insurance company that is trusted and registered with the OJK. Hopefully this information is useful for you!
Source: https://sindikasi.republika.co.id/berita/saa9841216000/ciriciri-perusahaan-asuransi-yang-bermasalah
The Importance of Disaster Insurance for Protection of MSMEs and the Indonesian Economy
The think-tank Indonesia Financial Group (IFG), known as IFG Progress, revealed that natural disasters pose a serious threat to the Indonesian economy if they are not handled seriously. Despite this, ownership of disaster insurance among vulnerable groups such as MSMEs is still very low.
According to IFG Progress, MSMEs play a major role in the Indonesian economy with a contribution reaching 61% of Gross Domestic Product (GDP) and absorbing 97% of the total workforce. However, data shows that only around 2.96% of the 64 million MSMEs had disaster insurance in 2019.
Reza Yamora Siregar, Head of IFG Progress, explained that Indonesia’s geographical location is vulnerable to natural disasters, coupled with the impact of climate change, making this country vulnerable to various types of disasters. This can have a big impact both in terms of demographics and economic losses.
IFG Progress also highlights the inequality of Early Warning Systems (EWS) and disaster insurance throughout Indonesia. Even though several regions have EWS, there are still many areas that are not covered. Therefore, IFG Progress emphasizes the need to increase EWS and disaster insurance, especially to protect MSMEs and other vulnerable groups.
The studies conducted also show that insurance protection is very necessary to mitigate the impact of disasters on the economic sector, especially for vulnerable communities such as MSMEs. Thus, disaster insurance protection is expected to become part of the social safety net and contribute to increasing community resilience.
The government has responded to this challenge by establishing a Disaster Risk Financing and Insurance Strategy (PARB) in 2018. Through the PARB strategy, risk layering and collaboration is carried out between the Government, the private sector and the community to overcome the challenges of natural disasters and increase Indonesia’s economic resilience.
PTUN’s decision regarding Kresna Life is considered to have the potential to become a negative precedent for the insurance industry
The decision of the State Administrative Court (PTUN) in favor of PT Asuransi Jiwa Kresna (Kresna Life) in a dispute with the Financial Services Authority (OJK) has raised concerns in the insurance industry. Insurance observer from Padjadjaran University (Unpad), Reza Ronaldo, said that this could open a bad precedent for law enforcement in this sector.
Even though the OJK has revoked Kresna Life’s business license based on applicable regulations, the PTUN’s decision annulled the OJK’s action. Reza Ronaldo highlighted that this could encourage other insurance companies to file similar lawsuits if they are sanctioned by the OJK.
Reza stressed that OJK needs to take firm steps to ensure its decisions are respected and its supervision of the insurance industry remains effective. He advised OJK to strengthen arguments and evidence in the court process, as well as carry out public outreach about the role and authority of OJK in supervising the financial sector.
Meanwhile, OJK has stated that it will appeal the PTUN’s decision. Chief Executive of the OJK Insurance, Guarantee and Pension Fund Supervision, Ogi Prastomiyono, emphasized that the revocation of Kresna Life’s license was in accordance with applicable regulations. OJK acts to protect consumers and life insurance policy holders.
This article is brought to you by L&G Insurance Broker, insurance broker Indonesia..
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