Liga Asuransi – Hello risk takers, let’s review interesting developments and events in the world of Indonesian insurance in the last week. We would like to remind you that in business, insurance objects are not only limited to vehicles, health, life and property. In fact, the scope of insurance objects is very broad and covers almost all aspects of business processes. In this edition, we have curated 7 important news related to insurance that you must know, including hot topics regarding Tapera. If you found this article useful, don’t hesitate to share it with your colleagues so that they can also gain the same insight.
Askrindo and BUMN Help MSMEs in Banda Neira! Check out the real steps in encouraging digitalization and the environment!
Indonesian Credit Insurance (Askrindo) shows its support for the development of micro, small and medium enterprises (MSMEs) in Banda Neira, Central Maluku, through the BUMN Batch VI Volunteer Service Program. This program is part of BUMN’s social and environmental responsibility (TJSL) which is being implemented in various locations in Indonesia, including Banda Neira, from 14-17 August 2024.
Askrindo’s Main Director, Fankar Umran, revealed that this activity aims to strengthen the role of BUMN as development agents and implement AKHLAK values. Apart from focusing on MSMEs, Askrindo also supports programs in the fields of environment, education and health, in accordance with the direction of BUMN Minister Erick Thohir.
Askrindo, which synergizes with members of the Indonesia Financial Group (IFG) holding company, is also active in increasing marketing digitalization for MSME players in Banda Neira. It is hoped that this program can make MSMEs in Banda Neira more adaptive to technological developments, so that they are able to take advantage of digitalization to advance their businesses.
Apart from outreach, Askrindo also provides assistance in the form of supporting facilities for local MSMEs. Not only in Banda Neira, Askrindo people also took part in the Bakti BUMN Batch VI program in various other regions, such as Nias, Bangka, Lembata and Halmahera.
In the spirit of caring, Askrindo sent four female volunteers from Askrindo Muda to several regions in Indonesia to be involved in various activities that support MSMEs and other fields. The activities carried out are not only limited to MSMEs, but also include cleaning beaches, planting trees, making rubbish bins, painting schools, mapping environmental issues, training in first aid in emergencies (PPGD), and distributing healthy food.
This activity is a real form of concern for BUMN, which not only focuses on economic development, but also on social and environmental aspects in various regions in Indonesia.
Tugu Insurance Wins Prestigious Award! Sharia Unit Prints Nearly 100% Growth in 2024
PT Asuransi Tugu Pratama Indonesia Tbk (TUGU), known as Tugu Insurance, has just won an award Sharia Business Unit of General Insurance in the event Top and Halal Award organized by Warta Ekonomi. This award is clear evidence of Tugu Insurance’s contribution to the development of the sharia industry in Indonesia.
Tugu Insurance was deemed worthy of receiving this award based on several criteria, namely trustworthiness of 30 percent, integrity of 27 percent, innovation of 26 percent, and competitiveness of 15 percent. These criteria are the main reference in assessing the sustainability of a halal lifestyle.
This award event also received full support from the Vice President of the Republic of Indonesia, K.H. Ma’ruf Amin, who attended virtually and gave a speech. He emphasized the importance of collaboration and synergy between stakeholders to increase literacy and inclusion in the Islamic economy and finance in Indonesia.
President Director of Tugu Insurance, Tatang Nurhidayat, expressed his appreciation for this award. He stated that this event was an important support for the sustainability of the halal industry in Indonesia, especially in the sharia insurance sector.
Tugu Insurance continues to actively participate in strengthening the sharia economic ecosystem in Indonesia, by offering various sharia insurance products and services that provide optimal protection and benefits for the community. Tugu Insurance’s Sharia Business Unit (UUS) is currently showing very positive growth, with an almost 100% increase in insurance premiums during the first semester of 2024 compared to the same period last year.
Seeing this achievement, Tugu Insurance is optimistic that the Sharia Unit business will continue to develop and be in line with the company’s targets for 2024. The company is also committed to continuing to optimize market potential and seize existing opportunities well.
Megathrust Alert! Indonesian Insurance Company Prepares Effective Strategy to Face the Threat of a Powerful Earthquake!
General insurance companies in Indonesia are preparing to face the potential for a devastating Megathrust earthquake which was recently warned by the Meteorology, Climatology and Geophysics Agency (BMKG). BMKG warned that Indonesia was “just a matter of time” before experiencing a major earthquake and tsunami caused by two Megathrusts that had not yet released their energy. This became the spotlight after the large earthquake with a magnitude of 7.1 which triggered a tsunami in Japan due to the Naika Megathrust.
Earthquakes are a natural disaster that can have a major impact, including significant material loss. Business buildings and homes are at risk of serious damage due to earthquake shocks. This is where the role of earthquake insurance becomes very important, because insurance companies will provide compensation to policy holders whose buildings are destroyed or damaged as a result of this disaster.
Deputy Main Director of PT Asuransi Cakrawala Proteksi Indonesia (ACPI), Nicolaus Prawiro, stated that his party was not worried about the potential for a Megathrust earthquake in Indonesia. According to him, the company has implemented a measurable mechanism to anticipate these risks.
“In the insurance business, all potential risks have been carefully calculated. For catastrophic insurance, such as earthquake insurance, the mechanism has been well regulated by the Financial Services Authority (OJK), including the reinsurance program,” said Nicolaus to CNBC Indonesia on Friday, August 23 2024 .
Nicolaus also emphasized that as long as the government continues to implement existing regulations, claims on insurance policies will remain safe. One of the anticipatory steps taken is to run a reinsurance program, which helps absorb the risk of excess claims in the company.
Until the first semester of 2024, ACPI has distributed claims due to the earthquake amounting to IDR 6 million, down 90% compared to the same period the previous year, where the number of claims reached IDR 63 million.
President Director of PT Asuransi Wahana Tata (Aswata), Christian Wirawan Wanandi, also confirmed that the level of earthquake or natural disaster insurance claims in Aswata will still be at a safe level during the first half of 2024.
“We have reviewed risk management by looking at accumulated business per area, compared with company capital, retention and reinsurance programs,” said Christian.
Earthquake insurance is an additional benefit of property insurance. By analogy, this is similar to health insurance which has additional benefits for dental care or childbirth. This insurance provides financial protection against the risk of fire, lightning, explosion, falling aircraft or objects from the aircraft, and smoke (FLEXAS). Other covered risks include riots, hurricanes, floods and earthquakes.
Which is More Profitable: Traditional Insurance or Unitlink? This is an explanation from AAJI
The Indonesian Life Insurance Association (AAJI) revealed that traditional and unitlink insurance products are both in demand by the public, with each offering different benefits and advantages. AAJI Executive Director, Togar Pasaribu, explained that this can be seen from the sales portion of these two types of products in the first quarter of 2024. Based on data from AAUI, unit-link life insurance products accounted for 41.8%, while traditional products were slightly higher with a share of 58.2%.
Premium income from traditional products in the first quarter of 2024 reached IDR 26.77 trillion, an increase of 18.4% compared to the same period last year. Meanwhile, the unitlink life insurance product managed to record premium income of IDR 19.22 trillion in the first quarter of 2024, also an increase compared to the first quarter of 2023.
Togar explained that this increase was influenced by three main factors: increasing public awareness of the importance of risk protection, the relevance of insurance products which are increasingly in line with people’s needs, and maintained capital market stability.
Furthermore, Togar added that each product has its own advantages. Unitlink products, for example, offer flexibility and higher investment growth potential, because they combine protection with investment. On the other hand, traditional products offer certainty in benefits with fixed premiums and lower risks, providing stability and security despite less flexibility in investment.
Responding to the new regulations governing the sale of Insurance Products Linked to Investment (PAYDI) in SEOJK 05 of 2023, Togar said that these regulations encourage the management of unitlink products to be more transparent, responsible and careful. According to him, this can increase the public’s positive perception of unitlink products, especially among young people who were previously hesitant due to a lack of understanding or concerns regarding risks.
AAJI also regularly provides education to the public, including the younger generation, regarding insurance products and services through various social media platforms, with the aim of increasing public understanding and awareness of insurance.
Insurance Brokers Can Save Your Business from Big Risks, Here’s the Explanation!
Marsh Indonesia emphasizes the important role of insurance brokers in helping companies manage risk to keep their business and workforce strong. CEO of Marsh McLennan Indonesia, Douglas Ure, said that although the insurance penetration rate in Indonesia in 2022 will only reach 2.27 percent, there is a striking gap between insurance literacy and inclusion, with a literacy rate of 31.7 percent and inclusion of only 16.6 percent.
Douglas also highlighted that global key risks continue to change over time. In the short term, misinformation and disinformation are the biggest threats, while extreme weather and critical changes to the Earth system are the main risks in the long term.
“Risks always evolve over time,” Douglas said. He added that insurance brokers have an important role in helping companies recognize risks, plan strategies and provide industry-appropriate mitigation measures. Apart from that, brokers also help companies get optimal insurance protection in terms of cost and coverage, according to their business risk profile.
Douglas emphasized that as the risks they face become increasingly complex, companies need to continually update their understanding of the most pressing business risks and improve risk management to achieve better results.
SVP Business Development Leader Marsh McLennan Indonesia, Nova Tambunan, added that awareness of the important role of insurance brokers in Indonesia is still low. Marsh is committed to educating the Indonesian market about the importance of insurance brokers in managing risk, especially for business people.
“Our goal is to help business people become more resilient in managing risks, both in terms of business and workforce, so that they can protect their business better,” said Nova.
Boat Insurance Business Soars! This is the reason why Marine Hull is the favorite this year
A number of general insurance companies predict that the marine hull or ship frame insurance business will continue to grow with bright prospects until the end of this year. PT Asuransi Jasa Indonesia (Asuransi Jasindo) confirmed this projection, citing increasing economic activity and maritime trade volume which had an impact on the acquisition of new insureds.
Jasindo Insurance Company Secretary, Brellian Gema, explained that factors such as price fluctuations in the shipping sector, natural disasters and international geopolitics still need to be watched out for because they can affect the shipping industry globally. However, gross premiums from Jasindo’s marine hull insurance in semester I-2024 recorded a significant increase of 41.93%, reaching IDR 130.01 billion compared to the same period the previous year.
In line with Jasindo’s view, PT Asuransi Asei Indonesia is also optimistic that the performance of marine hull insurance will remain bright, supported by improvements in government regulations related to maritime trade and shipping infrastructure projects. Asei’s Chief Technical Officer, Irsyam Fasya, said that the increase in maritime transportation activities also influenced this positive prospect. Asei’s marine hull premium income even grew 116% in semester I-2024, reaching IDR 8.24 billion.
PT Asuransi Central Asia (ACA) also projects positive prospects for marine hull insurance. However, Head of Division Marine & Aviation ACA, Hasudungan Sianipar, reminded the need to apply the principles of prudent underwriting and strict risk selection. ACA recorded marine hull premium income of IDR 79.27 billion in semester I-2024, with growth of 23% compared to the same period the previous year.
According to data from the Indonesian General Insurance Association (AAUI), the marine hull insurance industry recorded premium income of IDR 895 billion in the first quarter of 2024, an increase of 27.4% compared to the previous year. These figures underline the promising growth potential of the marine hull insurance sector, although there are risks that must be anticipated.
Jasindo Agricultural Insurance: Indonesian Innovation that Rocks the World and Supports Food Security
Agricultural Insurance products from PT Asuransi Jasa Indonesia (Jasindo) further strengthen its role in supporting national food security. This insurance not only provides protection to farmers from the risk of crop failure due to natural disasters, but has also received international attention.
At the NTU Global Advanced Investment Program (GAIP) business competition held at Nanyang Technological University (NTU), Singapore, Jasindo Agricultural Insurance products were the main focus in the case study presented by a team of students from the Faculty of Economics and Business, Gadjah Mada University (FEB UGM ). This team managed to achieve runner-up position, competing with more than 100 teams from well-known universities around the world.
Jasindo Agricultural Insurance products are recognized as capable of facing major challenges in the Indonesian agricultural sector. Combining Artificial Intelligence (AI) technology and an integrated scoring system, Jasindo not only offers protection, but also reduces the risk of moral hazard, creating a sustainable solution for farmers.
This success proves that insurance innovation from domestic companies has great potential to be implemented globally.
Jasindo Insurance not only provides benefits for Indonesian farmers, but also becomes a model that can be adopted in various countries, especially in facing the challenge of global food security.
With a commitment to innovation and sustainability, Asuransi Jasindo continues to strive to strengthen its role in supporting food security and the national economy, while making Indonesia a leader in agricultural insurance innovation on the international stage.
This news is brought to you by L&G Insurance Brokers, insurance broker experienced in Indonesia.
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