Liga Asuransi – Hello business people, let’s discuss important developments and events in the world of Indonesian insurance over the past week. It is important to remember that in the business world, insurance objects are not only limited to vehicles, health, life and property. The scope of insurance objects is much wider and covers almost all aspects of business processes. In this edition, we have selected 7 important news about insurance that you must know, including the latest topics regarding Tapera. If you found this article useful, feel free to share it with your colleagues so they can also gain the same insight.
Property Insurance Booms! GEGI and Tugu Insurance record premium increases of up to hundreds of billions
A number of general insurance companies in Indonesia have managed to record significant growth in the property insurance business line until July 2024. One of them is PT Great Eastern General Insurance Indonesia (GEGI), which earned property insurance premium income of IDR 299 billion, an increase of 20% compared to the same period. last year. This increase was mainly driven by the commercial and industrial sectors which accounted for 95% of total premiums.
GEGI Marketing Director, Linggawati Tok, revealed that the company continues to educate the public about the importance of property insurance, especially to protect against the high risk of earthquakes in Indonesia. As of July 2024, GEGI has around 8,000 residential customers, with 25% of them being customers related to bank credit. Interestingly, non-credit bank customers are more aware of the importance of earthquake insurance than bank credit customers who are only required to have fire insurance.
Apart from GEGI, PT Asuransi Asei Indonesia also recorded positive performance with property insurance premium income reaching IDR 14.8 billion, an increase of 90% from the same period in 2023. Head of Asei’s Claims & Subrogation Division, Eko Sulistyo Raharjo, said that this increase was mainly driven by by expanding cooperation with brokers, strengthening agencies, and integration with other products.
However, Eko admits that public awareness of the importance of property insurance is still relatively low, especially for property that is not related to bank credit. However, Asei continues to provide education through its branches to increase public understanding about fire risks and the importance of property insurance.
Not to be left behind, PT Asuransi Tugu Pratama Indonesia Tbk or Tugu Insurance recorded a significant jump with premium income from property insurance reaching IDR 2.2 trillion until July 2024, an increase of 157% from the same period last year. President Director of Tugu Insurance, Tatang Nurhidayat, stated that this surge was driven by increasing public and company awareness of the importance of property insurance in protecting their valuable assets.
Overall, based on data from the Indonesian General Insurance Association (AAUI), property insurance premium income in Indonesia in the first quarter of 2024 reached IDR 9.59 trillion, growing 51% compared to the same period the previous year.
With this growth trend, it is increasingly clear that Indonesian people are starting to realize the importance of insurance protection for property, both for commercial assets and residential homes, especially amidst the increasing risk of natural disasters in this region.
Insurance Brokers: Unsung Heroes Who Save Your Business Amid Global Uncertainty
In the midst of intense competition in the Indonesian insurance industry, the role of insurance brokers often goes unnoticed. As a liaison between insurance companies and customers, their role is often invisible, even though it is very important in helping customers choose the right insurance company and supporting them during the claims process.
Nova Tambunan, SVP Business Development Leader at Marsh Indonesia, highlighted the low awareness of business people and companies in Indonesia regarding the role of insurance brokers. In a discussion in Jakarta, he explained that the insurance penetration rate in Indonesia in 2022 will only reach 2.27 percent, with an insurance literacy rate of 31.7 percent and insurance inclusion of only 16.6 percent. This indicates a significant gap between people’s understanding of insurance and their active participation in the industry.
On the other hand, global reports on the impact of the Covid-19 pandemic and the Russia-Ukraine conflict highlight various risks that continue to increase, such as declining economic growth, surging inflation and energy supply disruptions. In the midst of this situation, Nova emphasized the important role of insurance brokers in helping companies understand and manage increasingly complex business risks.
Insurance brokers, according to Nova, do more than just recommend insurance policies. They act as customer representatives, helping identify risks, plan mitigation strategies, and ensure companies have insurance coverage that suits their business needs and risk profile.
Insurance brokers are heroes who are not always visible, but play a vital role in keeping businesses resilient amidst global uncertainty. With their role, companies can be better prepared to face ever-evolving challenges and risks, ensuring business continuity and stability in the future.
Generali Indonesia Pays IDR 608.2 Billion Claims in Semester I/2024, Surge in Health Claims in the Spotlight
In the first semester of 2024, PT Asuransi Jiwa Generali Indonesia (Generali Indonesia) has paid claims worth IDR 608.2 billion. These claims cover more than 140,000 cases, including death, critical illness and health claims. Generali Indonesia’s Chief Marketing Officer, Vivin Arbianti Gautama, revealed that the number of claims paid had increased by 13% compared to the previous period. Of the total claims, 78% were health claims, which reflects medical inflation which has an impact on increasing prices of medicines and medical services.
Vivin emphasized that this claim payment shows Generali Indonesia’s commitment to assisting customers, especially in difficult times, as well as realizing one of the company’s values, namely “Deliver on The Promise,” by paying claims in accordance with the policy provisions.
Even though claims are still high, Vivin remains optimistic that with cooperation between regulators and various stakeholders, medical inflation can be controlled. This is expected to minimize the increase in health claims and maintain the financial performance of the insurance industry.
Based on data from the Indonesian Life Insurance Association (AAJI), the life insurance industry recorded an increase in health claims in semester I/2024 of 26%, with total claims reaching IDR 11.83 trillion, up from IDR 9.39 trillion in the same period the previous year. Freddy Thamrin, Chair of AAJI’s Literacy & Consumer Protection Division, revealed that this increase in health claims created significant financial pressure for insurance companies, because the ratio of health insurance claims to premium income reached 105.7%.
Freddy also highlighted the big challenges facing the industry due to ever-increasing medical inflation. However, he ensured that the life insurance industry had strategic steps to face this trend. AAJI is committed to ensuring policyholders receive the best health services that suit their needs. Intensive collaboration with related parties, including the OJK, Ministry of Health, and hospitals, is expected to create a sustainable balance between the insurance industry and the health sector.
Overall, the life insurance industry in Indonesia managed to pay claims amounting to IDR 77.67 trillion from January to June 2024. This amount was distributed to more than 9.82 million life insurance beneficiaries. Although total claims paid tend to decrease, health claims continue to increase, indicating ongoing pressure in the health insurance sector.
IDR 38 Billion Corruption Revealed! Corruption Eradication Committee Detains Former Director of PT Jasindo and Boss of PT Mitra Bina Selaras
The Corruption Eradication Commission (KPK) has named and detained two suspects in an alleged corruption case related to agent commission payments by PT Asuransi Jasa Indonesia (Persero) (PT Jasindo) to PT Mitra Bina Selaras (MBS) during the 2017-2020 period. The two suspects are SHT, who served as Director of Retail Operations at PT Jasindo in 2013-2018, Director of Operations and Retail in 2018-2019, and Director of Business Development in 2019-2020. Another suspect is TSP, owner and controller of PT MBS.
The KPK has detained the two suspects from August 27 to September 15 2024. TSP is being held at the Class 1 Detention Center in East Jakarta, KPK Branch Kav. 4, while SHT is being held at the Class 1 Detention Center, East Jakarta, KPK Kav Branch. C1.
SHT and TSP allegedly benefited from agent commission payments by PT Jasindo to PT MBS, even though PT MBS did not carry out its duties as an agent. As a result, this action reduced PT Jasindo’s profits and caused state losses of around IDR 38 billion.
The actions of the two suspects violated various regulations, including Law Number 40 of 2014, Financial Services Authority Regulation Number 69/POJK.05/2016 and Number 67/POJK.05/2016, as well as Directors’ Decree No. SK 041/DMA/XII/2013 concerning Agency Management System at PT Jasindo.
The two suspects were charged under Article 2 paragraph (1) or Article 3 of Law of the Republic of Indonesia Number 31 of 1999 concerning the Eradication of Corruption Crimes which has been amended by Law of the Republic of Indonesia Number 20 of 2001, in conjunction with Article 55 paragraph (1) of 1, in conjunction with Article 64 paragraph (1) of the Criminal Code.
December 2024, Health Insurance Center Data Ready to Control Skyrocketing Claims!
The insurance industry in Indonesia will soon utilize a special data center for health insurance policies starting December 2024. This data center is expected to be the main solution for insurance companies in controlling the rate of claims which is increasingly burdening the industry.
Benny Hadiwibowo, Head of the R&D Department of the Indonesian Life Insurance Association (AAJI), revealed that this data center is a long-standing dream which is now being realized together with the Ministry of Health and the Financial Services Authority (OJK). According to Benny, this data center will strengthen insurance companies’ ability to select potential insureds and improve risk mitigation.
“This will help us understand the risks of potential customers better, and can also be utilized by the Policy Guarantee Institution (LPS) when it starts operating. We hope that this national database can be operational in December this year,” said Benny at a press conference in Jakarta, Thursday ( 8/29/2024).
This data center is also a joint effort between the insurance industry, government and OJK to create a quality health service ecosystem. For insurance companies, this data center is expected to reduce the surge in health insurance claims which have increased significantly in recent years.
Based on AAJI data, health insurance claims reached IDR 11.83 trillion in semester I-2024, an increase of 26% compared to the same period the previous year. In semester I-2023, health insurance claims also jumped by 35.3% to IDR 9.39 trillion.
This surge in claims has disrupted the financial stability of several life insurance companies, which has led some companies to start limiting health insurance benefits, and some have even abandoned this line of business. This condition is exacerbated by the claims ratio which exceeds reasonable limits, reaching 105.7% in semester I-2024, which means the claims paid are greater than the premium income received.
With total health insurance premium income of IDR 11.19 trillion and claims reaching IDR 11.83 trillion, the health insurance claim ratio in semester I-2024 was at the level of 105.7%, higher than semester I-2023 which was 103.7%.
Source : https://investor.id/finance/371798/pusat-data-asuransi-kesehatan-ditarget-bergulir-desember-2024
AJB Bumiputera Falls! From Billions of Profits to Losses of IDR 683 Billion in 2023, What’s Up?
Bumiputera Joint Life Insurance (AJB), the oldest insurance company in Indonesia, experienced a drastic decline in its financial performance in 2023. Profits which had reached IDR 705 billion in the previous year, have now turned into losses of IDR 683.24 billion as of 31 December 2023.
Based on the financial report released on Friday (30/8/2024), AJB Bumiputera’s premium income fell significantly by 36.06% to IDR 750 billion, compared to IDR 1.17 trillion in the previous year. This decline was exacerbated by investment returns which fell 83.33%, from IDR 786.8 billion in 2022 to only IDR 132 billion at the end of 2023. As a result, the company’s total income dropped drastically 54.02% to IDR 1.04 trillion, far from IDR 2, 2 trillion in December 2022.
Meanwhile, claims and benefits expenses jumped 50.9% to IDR 996 billion, compared to IDR 660 billion the previous year. Insurance expenses also increased 42.3%, reaching IDR 1.03 trillion from the previous IDR 729 billion. Even though operating expenses decreased 17.29% to IDR 684 billion, the company’s total expenses still increased 10.66% to IDR 1.72 trillion, from IDR 1.55 trillion the previous year.
What is more worrying is that the company’s financial health level as measured by Risk Based Capital (RBC) shows a figure of minus 724%. This is far below the minimum threshold set by the Financial Services Authority (OJK) of 120%.
AJB Bumiputera’s sustainability is now under scrutiny, with heavy losses and weakening financial indicators, creating serious questions about the future of this legendary insurance company.
MSIG Life Pays Hundreds of Billions in Claims in Semester I-2024, Dominated by ISPA and Typhus
PT MSIG Life Insurance Indonesia Tbk (MSIG Life), previously known as Sinarmas MSIG Life, has just announced claim payments of more than IDR 336 billion throughout the first semester of 2024. This figure reflects the company’s commitment to protecting customers, especially from health risks. dominated by diseases such as Acute Respiratory Infections (ARI), typhus and dengue fever.
Wianto Chen, CEO & President Director of MSIG Life, revealed that the company has a very strong financial condition, with Risk Based Capital (RBC) reaching 1,876% as of June 2024, far above the Financial Services Authority (OJK) requirement of 120%. “This strong financial health allows us to continue to fulfill our customer protection commitments,” said Wianto in a written statement on Monday (2/9/2024).
Lukman Auliadi, Head of Customer & Marketing MSIG Life, added that the company is committed to supporting Indonesian people in maintaining health and body resilience, as well as ensuring financial protection when the risk of disease is unavoidable. This is realized through various innovations, including the VEGA by MSIG Life mobile application which makes it easier for customers to access policy and claims services.
“The innovation in protection solutions, health ecosystems and digital services that we present is a manifestation of MSIG Life’s commitment to always be a trusted partner for the Indonesian people in living a more meaningful life,” concluded Lukman.
With solid financial conditions and various innovations presented, MSIG Life continues to show its dedication to being at the forefront in providing protection for customers amidst increasingly complex health risks.
This news is brought to you by L&G Insurance Brokers, insurance broker experienced in Indonesia.
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