Liga Asuransi – The Indonesian insurance industry is facing interesting dynamics, from major challenges arising from phenomena such as illegal online loans (pinjol) and online gambling (judol), to promising growth opportunities from technological innovation and a focus on sustainability. This article summarizes the latest developments in the insurance sector, including the achievements of large companies, such as PT Asuransi Tugu Pratama Tbk. and BRI Insurance, as well as strategic steps taken by industry players to face challenges. In this discussion, it is also discussed how technology such as EcoAI can bring about a sustainability transformation in this sector. Let’s explore in more depth how the insurance industry is adapting and innovating to stay relevant in an ever-changing era.
PT Asuransi Tugu Pratama Tbk. Targeting Profit of IDR 100 Billion in 2024, Growing Rapidly Thanks to Focus on Main Business
PT Asuransi Tugu Pratama Tbk. (TUGU) is targeting ambitious consolidated profit growth, namely reaching IDR 100 billion by the end of 2024. TUGU’s Director of Finance and Corporate Services, Emil Hakim, revealed that the company has exceeded the profit target set as of September 2024. Even so, Emil hopes for further growth continued until the end of the year, with additional profits of around IDR 75 billion to IDR 100 billion.
Exciting Achievements in the Third Quarter
At a press conference Publix Expose TUGU which was held on December 4 2024, Emil stated that even though the company had recorded profits that exceeded the target, his party was still optimistic that there would be a significant contribution from the TUGU insurance business in the remaining time until the end of the year. With the remaining three months, the company is optimistic that it can continue to strengthen its financial position and achieve the targets it has set.
Positive Performance of Gross Premiums
One of the key factors driving higher profit targets is positive performance in achieving gross premiums. Until September 2024, TUGU recorded total gross premiums of IDR 6.8 trillion, an increase of 26% compared to the same period in the previous year. This significant increase was mainly driven by large contributions from business classes (Class of Business/CoB) such as fire and property, engineering, and marine hull which showed stable growth.
Optimism for 2025: Focus on Corporate Action
Moving into 2025, Emil projects that TUGU’s consolidated profit will grow by around 10% compared to the results at the end of 2024. One of the main drivers of this growth is the corporate action plan that will be implemented by the company. TUGU plans to optimize the company’s assets overseas, which is currently in the evaluation process. Emil explained that although the value of these assets cannot be ascertained, the company hopes to obtain reasonable and significant figures from this optimization.
Conclusion
PT Asuransi Tugu Pratama Tbk. shows very positive performance in 2024, with the profit target almost achieved and even higher than expected. The soaring gross premium achievement and focus on key business sectors are the main driving factors for TUGU’s growth. With high optimism and an ongoing corporate action plan, this insurance company is ready to face 2025 with brighter prospects and greater growth.
BRI Insurance Pays Claims of IDR 2.4 Billion for Sunken Cargo Ship
PT BRI Asuransi Indonesia (BRI Insurance) has once again proven its commitment as a reliable protection partner. On Friday (6/12/2024), this company submitted a claim worth IDR 2.4 billion to PT Trijaya Segaran Makmur for losses suffered due to the sinking of their cargo ship at the port of East Kalimantan.
Commitment to the Best Protection
Branch Manager BRI Insurance Surabaya Branch, Imam Pambudi, emphasized that his party always prioritizes its responsibility in protecting customer assets. “We always take full responsibility for protecting customer assets,” said Imam.
He also expressed his appreciation to PT Trijaya Segaran Makmur for their awareness in protecting assets through insurance. “With insurance, payment of claims like this can help recoup ship repair costs,” he added.
The Importance of Asset Protection
This cargo ship sinking incident is a reminder of how important insurance protection is for valuable assets, especially those with high risks such as cargo ships. As one of the leading insurance companies in Indonesia, BRI Insurance comes with a variety of products designed to meet the protection needs of the community.
The insurance products offered cover various types of assets, ranging from motor vehicles, property, to ships. Premiums that are flexible and tailored to customer needs make BRI Insurance products easily accessible to various levels of society.
“With a commitment to providing optimal service and reliable protection solutions, BRI Insurance continues to strive to be a trusted partner for the Indonesian people in protecting their valuable assets,” said Imam.
Fast and Easy Claim Process
A fast claims process is one of the advantages of BRI Insurance. Rusli, an agent from PT Juara Management Consultants representing PT Trijaya Segaran Makmur, praised the speed and ease of the Marine Hull claim process at BRI Insurance.
“Usually, the Marine Hull claim process takes up to 30 days. “However, at BRI Insurance, claims can be processed in just two weeks,” explained Rusli.
Trusted Protection Partner
With a solid track record and various protection solutions that are easy to reach, BRI Insurance continues to strengthen its position as a trusted protection partner for the community. The speed in handling claims such as that experienced by PT Trijaya Segaran Makmur is clear evidence of the excellent service offered.
This story underscores the importance of having insurance as a form of risk mitigation that can provide financial protection in unexpected times. BRI Insurance again shows that with the right protection, large losses can be overcome easily, providing peace of mind for its customers.
ACA Faces Challenges and Opportunities in the General Insurance Industry 2024
The general insurance industry continues to face challenging dynamics, but PT Asuransi Central Asia (ACA) is optimistic that it can overcome it with innovative and adaptive strategies. In his interview with happy on Wednesday (4/12/2024), Head of the ACA Corporate Communication Division, Ody Mahendra, reveals a number of challenges as well as the steps taken by the company to continue growing.
General Insurance Industry Challenges
According to Ody, one of the main challenges is premium rate competition which is getting tighter. Market penetration is still low and the need for product and service innovation is also a big concern for industry players.
Apart from that, the implementation of new regulations such as International Financial Reporting Standards (IFRS) 17 adds operational complexity. “Coupled with intense competition between domestic and foreign insurance companies, we are required to continue to innovate in order to attract consumer interest,” explained Ody.
The general insurance industry also has to face the impact of decline in car sales which affects premium income, especially in the motor vehicle insurance line. This is projected to put pressure on overall growth in 2024.
ACA Strategy Facing Challenges
Even though these challenges are quite difficult, ACA remains confident that it can maintain growth through various strategic steps. Ody explained that the company focuses on:
- Product diversification: Developing other insurance lines outside motor vehicles.
- Digital marketing: Strengthening digital presence to reach wider consumers.
- Customer service improvements: Providing excellent service to build customer loyalty.
“This strategy allows us to maintain growth even though the market is facing various pressures,” said Ody.
Positive Projections for the Insurance Industry
Ody is also optimistic about the projected growth in general insurance industry premiums predicted by the Indonesian General Insurance Association (AAUI) of 10%–15% by the end of 2024. Factors such as financial inclusion literacy programs, economic growth, increasing people’s incomes, and technological advances provide great hope for this industry.
“With the support of various programs and innovations, this growth is very realistic to achieve,” added Ody.
ACA’s Improved Performance
ACA itself shows solid performance. Based on the latest financial report, the company recorded premium of IDR 3.05 trillion as of October 2024, increased 1.66% compared to the same period last year amounting to IDR 3 trillion.
With a planned strategy and high optimism, ACA is ready to face the challenges of 2024 while taking advantage of existing opportunities to strengthen its position as a major player in the Indonesian general insurance industry.
Indonesian Insurance Industry Outlook: Opportunities and Challenges Towards 2025
The Indonesian insurance industry is at a promising crossroads, with great opportunities for growth as well as challenges to overcome. Financial Services Authority (OJK) projects that by 2025, this sector can reach its maximum potential if industry players are able to optimize growth and mitigate existing risks.
In the discussion entitled Coffee (Chatting Opinions) Series 2024 – Insurance Outlook: What is the Condition of National Insurance in 2025 and the New Government Era?, Director of Supervision of General Insurance and Reinsurance OJK, Munawar, explains the strategic points that are key to the growth of the insurance industry in Indonesia.
Opportunities amidst Low Penetration
Munawar underlined that The level of insurance penetration in Indonesia is still low when compared with developed countries. Even though it is a challenge, this condition actually creates great opportunities. “People’s need for financial protection products continues to increase, supported by stable economic growth. There are still many people who are not protected by insurance, so the room for growth in this industry is still quite large,” he explained, Wednesday (4/12).
Targeted economic growth achieved 8% by 2025 will have a positive impact, especially in driving demand for various insurance products, such as property, credit and business insurance.
Strategy to Increase Insurance Literacy
One of the main challenges is lack of insurance literacy among the community. Munawar emphasized the importance of collaboration between the government, industry players and the media to increase public awareness about the benefits of insurance. “This collaboration is very necessary so that more people understand the importance of having financial protection,” he said.
Government Program as a Driver
Munawar mentioned several strategic government programs, such as development three million homes per year, as the main driver of property insurance growth. In addition, increasing economic activity is also predicted to strengthen demand for credit and business insurance.
“With these programs, the contribution to the growth of the insurance industry in 2025 is expected to be significant,” he said.
Global Challenges and New Regulations
Even though he is optimistic, Munawar reminded that the industry still has to be prepared to face challenges from global uncertainty, such as economic and geopolitical fluctuations. Implementation of new regulations, such as BOY 20 And PSAK 107, will also affect the operations of insurance companies.
“With these regulations, insurance companies must increase their technological and governance capacity to meet existing standards,” he explained.
Industry Ethics and Compliance
Apart from the technical aspects, Munawar highlighted the importance of implementing strict ethical standards in the insurance ecosystem. He emphasized that industry associations need to take a greater role in ensuring members’ compliance with ethical rules and standards.
“The association must be more active in maintaining the credibility of the industry, including providing strict sanctions for violators,” he stressed.
Optimism Towards 2025
With a combination of great opportunities, government support and the right strategy, Munawar is optimistic that the Indonesian insurance industry will be able to grow rapidly. However, this success requires close collaboration from all parties, as well as readiness to face various challenges that may arise along the way.
“If all parties can work together, we can bring the Indonesian insurance industry to a higher level in 2025,” concluded Munawar.
Improving Business Sustainability Through EcoAI Technology: Transforming the Insurance Industry
In an era that increasingly prioritizes sustainability, Artificial Intelligence (AI) technology continues to develop from just a tool to become a decision-making agent. One of the revolutionary concepts is EcoAI, the application of AI based on sustainability principles. This technology not only improves business efficiency, but also helps companies achieve their goals Environmental, Social, and Governance (ESG).
Muhammad Ariono Margiono, Associate Professor in Management at Binus University, emphasized that EcoAI is able to guide companies to operate more environmentally friendly and efficiently. In an event AAJI Marketing & Communication Summit 2024, Ariono explained that AI now deserves to be seen as a companion agent, no longer just a tool.
“AI is not just a tool, it is an agent with decision making capabilities. If used correctly, AI can be a co-pilot that helps businesses achieve sustainability. However, if applied incorrectly, the impact can be the opposite,” said Ariono.
EcoAI and Sustainability Transformation
EcoAI offers a variety of innovative solutions relevant to modern challenges:
- Carbon Footprint Analysis: Monitor carbon emissions and energy use in real-time.
- Supply Chain Optimization: Reduce waste through predictive analytics.
- Environmental Risk Mitigation: Identify environmental threats in the company’s operational areas.
The implementation of EcoAI is also increasingly evident in the insurance industry, especially in driving efficiency and sustainability. AI enables more accurate premium calculations, product personalization, and ESG-based investment management.
AI in the Insurance Industry
The life insurance industry has made great strides by leveraging EcoAI. Executive Director of the Indonesian Life Insurance Association (AAJI), Togar Pasaribu, highlighted that this technology helps companies design more personalized and environmentally friendly services.
“With worsening environmental conditions, such as air pollution and climate change, EcoAI is a solution to calculate premiums accurately and personalize products according to customer needs,” explained Togar.
Furthermore, the implementation of EcoAI is in line with Financial Services Authority Regulation (POJK) Number 51 of 2017, which requires insurance companies to screen project data before investments are made. This supports the vision net zero emissions in 2050.
Prudential Indonesia Case: AI for Efficiency and Security
One of the pioneers in implementing EcoAI is Prudential Indonesia. By processing around 30 thousand claims every month, this company relies on AI to speed up claim verification, analyze customer data, and detect potential fraud.
“The claims process is now faster and more accurate. In addition, AI helps us recognize customer risk patterns so we can reduce the potential for fraud and increase security,” said Karin Zulkarnaen, Chief Customer & Marketing Officer of Prudential Indonesia.
Prudential also uses AI to strengthen customer education, such as presenting risk profile gamification, which allows potential customers to understand their risk profile more easily. This not only increases insurance literacy, but also expands product reach to the younger generation who care about sustainability issues.
Towards a Future of Sustainability
EcoAI is a great opportunity to create more efficient and sustainable businesses. However, companies must be wise in adopting this technology. Collaboration between regulators, companies and technology providers is key to maximizing the benefits of EcoAI while minimizing its risks.
With innovation that continues to develop, EcoAI is ready to become a new standard in business operations, especially for the insurance industry which is increasingly integrated with sustainability principles. As ESG demands increase, these technologies are no longer an option, but a necessity for a greener business future.
Negative Impact of Pinjol and Judol towards the Insurance Industry. These are the challenges faced by AAUI
The Indonesian General Insurance Association (AAUI) highlights the negative impact of illegal online loans (pinjol) and online gambling (judol) on the motor vehicle insurance and credit insurance industries. The General Chair of AAUI, Budi Herawan, explained that many people who are trapped in loans and judol cannot apply for motorbike loans because they are blacklisted by the Financial Information Services System (SLIK). “I often say, let’s together eradicate pinjol and judol completely. This has a domino effect that is detrimental to our sector, especially in credit insurance,” said Budi in a press conference at the AAUI Office on Tuesday, December 3 2024.
Challenges in Motor Vehicle Insurance and Credit Lines
AAUI data shows that the motor vehicle insurance business line only experienced slight growth of 0.9% year on year until September 2024, with a total premium of IDR 14.69 trillion. In fact, this business line is one of the main contributors to general insurance premium income. Budi said that the impact of pinjol and judol was very pronounced, considering that people who had registered with SLIK due to financial problems found it difficult to obtain motor vehicle credit facilities, which in turn affected demand for insurance.
Meanwhile, the credit insurance sector experienced quite significant growth, namely 21.1% yoy or reaching IDR 12.26 trillion. However, the number of credit insurance claims has also increased sharply, with growth reaching 44.2% yoy, which means claims paid have reached IDR 10.48 trillion. The paid claims ratio for credit insurance in the January-September 2024 period jumped to 85.5%, much higher compared to 71.8% in the same period the previous year. Budi assessed that this surge in claims was largely caused by the practice of pinjol and judol which worsened people’s financial conditions.
Domino Effect that is Harmful to the Insurance Industry
Budi said that this situation created a detrimental domino effect for the insurance industry. “We are not only facing stunted growth in motor vehicle insurance, but also reaping higher claims in credit insurance. This is the result of an unhealthy ecosystem, where financial difficulties caused by pinjol and judol worsen the performance of the insurance industry,” said Budi.
Hope for the New Government
With this increasing challenge, Budi hopes that the new government led by Prabowo-Gibran will tackle the practice of pinjol and judol at its roots. “This is a problem that requires serious attention from the government. We hope that with a firmer policy, the practice of borrowing and judol can be reduced significantly, and the insurance industry can return to healthy growth,” said Budi.
Conclusion
Illegal online lending and online gambling have had a much greater impact than expected on the insurance industry, particularly in the motor vehicle and credit sectors. In facing this problem, the government’s role is very important to eradicate these illegal practices so that the insurance industry can recover and develop again. Great hopes are now placed on the new government to overcome this problem for a more stable and healthy economic future.
Changes in the Dynamics of Life Insurance Premium Distribution: E-Commerce Grows, Insurance Brokers Decline
The Indonesian life insurance industry is experiencing significant changes in terms of premium distribution, with a quite striking shift between traditional channels and digital channels. The latest data from the Indonesian Life Insurance Association (AAJI) shows a decrease in premium distribution contributions through insurance brokers in the third quarter of 2024. On the other hand, the e-commerce distribution channel experienced a quite encouraging surge.
Reduced Premiums from Broker Channels
In the period January to September 2024, life insurance premiums obtained through broker distribution were recorded at IDR 2.71 trillion. This figure decreased by 24% compared to the same period in the previous year, which was recorded at IDR 3.57 trillion. This decline reflects reduced reliance on traditional distribution channels in the life insurance industry, although the role of brokers in providing consultation and advocacy during claims remains irreplaceable by technology.
E-Commerce Shows Rapid Growth
On the other hand, the e-commerce distribution channel actually showed encouraging results. Even though the contribution is still smaller compared to brokers, life insurance premiums recorded from this channel reached IDR 130 billion, recording an increase of 36.1% compared to the same period in the previous year, which was recorded at IDR 100 billion. This shows the increasing public interest in the ease and accessibility of purchasing insurance products via digital platforms.
OJK Target 2027: E-Commerce as Main Pillar
The Financial Services Authority (OJK) has encouraged the insurance industry to increasingly adapt digital technology. In fact, OJK targets that by 2027, the contribution of e-commerce distribution channels in the insurance industry will reach 45% of total premium income. With the rapid development of e-commerce and technology adoption, this change can open up new opportunities for insurance companies to reach more customers, especially among the younger generation who are more technologically savvy.
Position of Life Insurance Distribution Channels in Indonesia
So far, the bancassurance distribution channel remains the main contributor to life insurance premium income. Until the third quarter of 2024, the bancassurance channel was recorded as contributing premiums of IDR 57.70 trillion, with annual growth of 2.9%. The agency channel also continued to contribute significantly with premium income of IDR 42.99 trillion, growing 2.5% compared to last year.
However, even though insurance brokers are in fifth position in terms of life insurance premium contribution with IDR 2.71 trillion, their role still cannot be ignored, especially in the aspects of consultation and advocacy which are really needed by customers. As stated by the Chairman of the Indonesian Insurance and Reinsurance Brokers Association (Apparindo), Yulius Bhayangkara, even though technological disruption is changing the distribution landscape, the role of brokers in providing advice and handling claims remains important and irreplaceable.
Challenges and Future Prospects
Even though there has been a decline in premium contributions from broker channels, the life insurance industry still has great potential to adapt and develop, especially with the increasing adoption of digital technology. OJK continues to encourage the use of digital platforms to increase financial inclusion and provide easy access for the public to purchase insurance products.
However, these changes also present challenges for traditional players in the insurance industry. Many companies must invest more in digital technology to compete in an increasingly competitive market. Meanwhile, insurance brokers who have been the main partners in the distribution of insurance products must find ways to adapt to these changes and maintain their relevance in a rapidly evolving market.
Conclusion
Changes in the dynamics of life insurance premium distribution indicate a clear direction: e-commerce and digital technology will play an increasingly dominant role in the future. However, even though digital channels are developing rapidly, the role of insurance brokers in providing consulting and advocacy services is still needed, and they will continue to play an important role in facing the challenges of an increasingly complex insurance industry. With regulatory support from the OJK and appropriate technological adaptation, the Indonesian life insurance industry has the potential to develop more rapidly and inclusively.
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