Liga Asuransi – Hello risk takers, we are back to discussing 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 there is still a very wide range of objects that can be insured. , 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.
OJK Monitors Company Exposure to Credit Insurance Portfolio to Manage Liabilities Well
Jakarta, 17 May 2024 – The Financial Services Authority (OJK) continues to monitor companies that have exposure to credit insurance portfolios to ensure adequate liability management. This supervision was carried out because claims on credit insurance business lines in general insurance and reinsurance showed a significant increase.
OJK Chief Executive of Insurance, Guarantee and Pension Fund Supervision, Ogi Prastomiyono, explained that as a step to encourage better risk management, OJK is also trying to open access to guaranteed credit risk information. “By opening SLIK (Financial Information Services System) access to insurance companies,” said Ogi in an official statement on Friday.
With access to SLIK, insurance companies are expected to be more effective in assessing the credit risks they assume. This is important to ensure that their obligations are managed well and to reduce financial risks that could impact the stability of the insurance company.
SLIK is a system that provides complete information regarding individual and company credit history, which previously could only be accessed by financial institutions such as banks. By opening this access, insurance companies can obtain more accurate and up-to-date data regarding the credit risk profile of the parties they insure.
This step is part of OJK’s efforts to increase transparency and mitigate risks in the insurance industry. “We hope that with this access, insurance companies can be more proactive in managing risks and increase the stability of the insurance sector as a whole,” added Ogi.
OJK also reminded insurance companies to always comply with applicable regulations and improve the quality of their risk management. This supervision is expected to provide better protection for policyholders and ensure that insurance companies can continue to fulfill their obligations amidst increasing credit insurance claims.
Indonesian Insurance Industry Assets Reach IDR 1,128.86 Trillion as of March 2024
The Financial Services Authority (OJK) noted that insurance industry assets in Indonesia reached IDR 1,128.86 trillion as of March 2024, an increase of 2.49% year-on-year (yoy). OJK Executive Chairman of Insurance, Guarantee and Pension Funds, Ogi Prastomiyono, reported that the highest increase occurred in commercial insurance assets which rose 3.04%.
In terms of premium income performance, the commercial insurance sector showed a significant increase of 11.80% yoy, while the non-commercial insurance sector increased 6.22% yoy in the same period.
In the first quarter of 2024, the life insurance sector recorded the highest increase in the Health Insurance business line with an increase in premium income of 32.11% yoy, followed by the Term Death business line which rose 27.65% yoy. However, traditional types of health insurance still dominate with a premium composition of 72.78% of the total premium or IDR 33.32 trillion. On the other hand, Investment Linked Insurance Products (PAYDI) or unit links experienced a decline of -22.67% yoy with a total premium of IDR 12.46 trillion as of March 2024.
“OJK hopes that traditional insurance can grow significantly to encourage risk penetration for as many Indonesians as possible,” said Ogi in his written answer, Tuesday (14/5/2024).
The general insurance and reinsurance sectors also showed positive performance. The Property business line experienced the highest increase of 37.49% yoy, followed by Credit Insurance with an increase of 35.47% yoy.
Ogi also noted that sharia insurance shows great prospects in Indonesia. As of March 2024, Sharia Insurance and Reinsurance assets increased by 5.83% at a CAGR with total assets reaching IDR 45.10 trillion. In terms of premiums, sharia insurance increased 14.98% at a CAGR with a total premium of IDR 7.02 trillion.
“Efforts to develop sharia insurance and conventional insurance are carried out simultaneously while still paying attention to the differences in characteristics inherent in each type of industry,” he added.
With the large Muslim population in Indonesia and increasing demand for sharia financial products, OJK continues to encourage sharia insurance companies and Sharia Business Units (UUS) to develop authentic sharia-based products, not just labeling conventional products with sharia labels.
AXA Mandiri Optimistic in Facing Global Economic Uncertainty, Records Positive Performance in 2023
PT AXA Mandiri Financial Services (AXA Mandiri) views the insurance industry’s market potential amidst global economic uncertainty following the weakening of the rupiah exchange rate. President Director of AXA Mandiri, Handojo G. Kusuma, said that his company was still on the right track considering the significant growth in net profit throughout 2023.
“There is still a lot of room for AXA Mandiri to grow amidst global uncertainty. We focus on protection products whose needs are not much affected by economic movements, but rather on insurance awareness which continues to increase,” said Handojo in a presentation on AXA Mandiri’s 2023 Financial Performance at The Langham, Jakarta, Tuesday (14/5/2024).
Handojo added that the company continues to strive to maintain the AXA Mandiri portfolio in good condition as a sustainability strategy amidst economic challenges. He also emphasized that AXA Mandiri, as part of Bank Mandiri, has large business growth potential. Currently, AXA Mandiri has more than 3.8 million insured persons, the majority of whom come from Bank Mandiri customers.
“We remain optimistic about future business growth. There is still a lot of space that we can explore together,” he explained.
One of AXA Mandiri’s advantages is access to Bank Mandiri’s digital platform, namely Livin’. This provides a digital ecosystem that allows AXA Mandiri to continue to innovate through its superior products.
“As part of the Bank Mandiri ecosystem, we have innovated, pushing superior products,” said AXA Mandiri Director, Uke Giri Utama. He added that AXA Mandiri will strengthen digital systems which include scientific data, engineering data and system analysis. According to Uke, building an ecosystem between Bank Mandiri and AXA Mandiri is an important part of the business continuity of both.
“The most important thing is how we can build a good ecosystem between Bank Mandiri and AXA Mandiri smoothly. In this way, our goal of selling products to the right people can be done through digital channels,” he concluded.
AXA Mandiri recorded positive performance in 2023 by posting a net profit of IDR 1.33 trillion, an increase of 13% from IDR 1.17 trillion in 2022. Throughout 2023, AXA Mandiri recorded gross premium income of IDR 11.682 trillion with an increasing trend in customer premiums only 5.2% for the first year premium, which reached IDR 1.69 trillion.
AAUI Encourages Implementation of Third Party Liability Insurance for Motorized Vehicles
The increasingly high number of vehicle accidents has prompted the Indonesian General Insurance Association (AAUI) to encourage the implementation of third party liability (TPL) insurance for all motorized vehicles in Indonesia. Based on data from the Traffic Corps (Korlantas), in 2023 there will be 148,000 accident cases recorded. In addition, AAUI data shows that motor vehicle claim payments reached IDR 7 trillion in the same year.
Deputy Chair of Technical Division 3 AAUI, Wayan Pariama, explained that third party legal liability insurance (TPL) is a type of insurance that provides risk coverage for claims for compensation from third parties. “We are currently reviewing the potential for forming a consortium of mandatory TPL insurance providers to facilitate this need,” said Wayan at a press conference in Jakarta.
According to Wayan, with the number of AAUI members being 72 companies, a consortium needs to be formed to avoid confusion in society. “If all members participate, the public will be confused. So, there is an idea to create three consortium groups so that at least one can compete,” he said.
Currently, almost all vehicle insurance policies with all risk guarantees provide TPL protection. However, most insurance policies with total loss only coverage do not cover TPL, and most motorbikes are not protected by TPL insurance.
Previously, the Financial Services Authority (OJK) had planned to implement mandatory insurance, as stated in the Indonesian Insurance Road Map 2023-2027. This plan includes general vehicle insurance to insurance for events involving many people, such as football matches.
OJK will also require insurance for public vehicles. Currently, Jasaraharja only provides protection for drivers and passengers, not covering vehicles and third parties. This mandatory insurance can be launched by one insurance company or a consortium of several companies.
According to the Executive Chairman of the Insurance, Guarantee and Pension Fund Division of OJK, Ogi Prastomiyono, this step not only provides better protection to the public but also increases the penetration of insurance products in Indonesia.
OJK Issues New Regulations for Digital Insurance Products
The Financial Services Authority (OJK) has issued OJK Regulation (POJK) Number 8 of 2023 concerning Insurance Products and Marketing Channels for Insurance Products, which was promulgated on April 29 2024. Chief Executive of the OJK Insurance, Guarantee and Pension Fund Supervisor, Ogi Prastomiyono, explained that This regulation is in line with Law Number 4 of 2023 concerning Development and Strengthening of the Financial Sector (UU P2SK) as well as an adjustment to the previous regulation, POJK Number 23 of 2015.
“In particular regarding provisions related to the use of electronic and digital insurance policies and governance of insurance product development,” said Ogi in a press conference on the Results of the Monthly Board of Commissioners Meeting, Monday (13/5/2024).
This new regulation also simplifies the process for applying for insurance products while still prioritizing prudential principles and market behavior, in order to improve services to stakeholders.
Terms of Use for Digital Insurance Policies
In Article 58, POJK Number 8 of 2023 states that insurance companies or sharia insurance companies that organize and market insurance products digitally must fulfill several provisions:
- Have a registration certificate for electronic system operators issued by the authorized agency in accordance with the provisions of laws and regulations in the field of information and electronic transactions.
- Implement information technology risk management policies, standards and procedures.
- Fulfill all requirements required by the OJK and authorized institutions regarding the implementation of electronic systems.
Apart from that, insurance companies are also obliged to ensure that products marketed digitally meet the criteria for individual policy use and have a simple risk selection process.
Simplification of Insurance Product Applications
According to Article 42 of this regulation, OJK allows insurance companies and sharia insurance companies to organize and market insurance products without prior OJK approval, with several exceptions. Insurance products that require OJK approval include:
- Insurance products that have a savings or cash value element.
- Credit insurance products or sharia financing insurance products.
- Insurance products in the suretyship or sharia suretyship business line.
- Development of insurance products that have been marketed and result in material changes to the risks covered, exclusion or limitation of risk causes, as well as cash calculation methods.
Insurance products that are developments of products that have been marketed, but do not result in material changes, can be marketed without OJK approval.
Ogi hopes that with this regulation, the insurance industry in Indonesia can develop more quickly and provide better protection to the public. “This is a step forward to increase penetration of insurance products in Indonesia,” he concluded.
OJK Affirms Insurance Companies’ Obligation to Publish Financial Reports
The Financial Services Authority (OJK) emphasized that insurance and reinsurance companies are obliged to publish audited financial reports to the public, including when the company experiences problems such as payment failure or suspected corruption. Chief Executive of the OJK Insurance, Guarantee and Pension Fund Supervision (PPDP), Ogi Prastomiyono, explained that this obligation is regulated in Article 22 of the Law on Development and Strengthening of the Financial Sector (UU P2SK).
“Thus, this obligation is binding and will be subject to sanctions if it is violated,” said Ogi in his written answer quoted on Wednesday (15/5/2024). Ogi added that open financial reporting is one of the basic aspects of good governance. Apart from audited annual reports, companies are also required to upload quarterly financial reports on the company website as a form of transparency.
In notesBusiness, PT Dana Tabungan dan Asuransi Pegawai Negeri (Persero) or Taspen is in the public spotlight because its financial reports are not yet publicly accessible. Taspen’s financial reports became a concern after a case of alleged fictitious investment corruption emerged. When contacted, Taspen Corporate Secretary, Yoka Krisma Wijaya, did not provide a detailed explanation regarding the reasons why the company’s financial reports could not be accessed by the public via Taspen’s official website. However, he emphasized that Taspen remains committed to prioritizing the principle of transparency in its operations and business.
As part of this commitment, Taspen publishes financial reports and their derivatives based on Audit Standards (SA) 800 which are designed with a special purpose framework. This financial report is intended for several stakeholders. “The financial report is intended for the BPK [Financial Audit Agency], Ministry of BUMN, Ministry of Finance, BPKP [Financial and Development Supervisory Agency], OJK, shareholders, board of commissioners and directors of Taspen,” said Yoka toBusiness on Monday (6/5/2024).
Most recently, the Bumiputera 1912 Joint Life Insurance (AJB) quarterly report was not accessible to the public. The company’s annual financial reports are only available until 2022, while monthly financial reports end in August 2023. Previously, the monthly reports from January to March 2023 were still accessible to the public.
OJK emphasized that this step is not only to increase transparency and accountability, but also to protect the interests of policyholders and other stakeholders. Increasing transparency is expected to increase public trust in the insurance industry in Indonesia.
All 2024 Indonesian Hajj Pilgrims are protected by Life and Accident Insurance
The Indonesian government ensures that all Indonesian Hajj pilgrims receive protection through life and accident insurance during the 2024 Hajj pilgrimage. This statement was conveyed by the Hajj Media Center (MCH) Officer, Widi Dwinanda, in a press conference which was attended online on Thursday (16/05/2024).
“As part of protection, regular Indonesian Hajj pilgrims will get life insurance and accident insurance,” said Widi.
Widi explained that this insurance is given to Indonesian Hajj pilgrims from the time they enter the hostel, when they leave, until they are in the hostel when they return. This insurance is regulated by certain provisions that provide various benefits.
2024 Hajj Insurance Conditions:
- Life insurance:
- Pilgrims who die will be given insurance for the minimum Hajj Travel Cost (Bipih) per embarkation.
- Accident insurance:
- Pilgrims who die due to accidents will be given compensation worth two Bipih per embarkation.
- Pilgrims who experience accidents and suffer permanent disabilities will be given compensation in amounts varying between 2.5% to 100% Bipih per embarkation.
All management related to this insurance is carried out by the Government through the Directorate General of Hajj and Umrah Organizations (Ditjen PHU) of the Ministry of Religion (Kemenag) of the Republic of Indonesia. The insurance company will make claim payments via direct transfer to the congregation’s account.
“This insurance protects prospective Hajj pilgrims from embarkation until returning to their homeland through Hajj debarkation,” explained Widi.
With this insurance, the Government hopes to provide maximum protection for all Indonesian Hajj pilgrims, ensuring they can carry out the Hajj pilgrimage calmly and safely.
Source : https://www.borneonews.co.id/berita/340482-jamaah-calon-haji-indonesia-terlindungi-asuransi
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