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.
Tugu Insurance Wins 2024 HR Excellent Award
PT Asuransi Tugu Pratama Indonesia Tbk (Tugu Insurance), a subsidiary of BUMN, succeeded in achieving brilliant achievements by receiving an award HR Excellent Award 2024 from SWA Media Group and the Management Institute, Faculty of Economics and Business, University of Indonesia (LMFEB UI). This award was given at the event The 15th Indonesia HR Excellence Conference & Awarding 2024, which carries a theme “Building Agility and Work Experience Towards Future-Ready Organization”.
At this prestigious event, Tugu Insurance was awarded the title Very Good in categories Reward Management & Talent Retention Strategy. This achievement confirms Tugu Insurance’s position as a company that excels in human resource (HR) management, especially in reward and talent retention strategies.
This event was successful in attracting participation from 55 companies, coming from various industrial sectors, including banking, non-bank financial institutions, consumer goods, manufacturing, plantations, mining and energy, transportation, distribution, telecommunications, and startups. Each participant held a presentation and online question and answer session with a panel of judges, who then assessed the company’s HR performance in various categories, such as Learning and Development (L&D) and Knowledge Management, Reward Management and Talent Retention Strategy, HR Digitization and People Analytics, Employer Branding and Talent Acquisition, as well as Wellbeing Management. The participating companies were then given HR management ratings by level Excellent, Very Good, and Good.
This activity was carried out in response to the challenges of disruption in HR management, especially with rapid technological developments and changing trends in the world of work. The company’s ability to adapt and utilize the latest technology is the key to winning competition in an increasingly dynamic business world.
Emil Hakim, Director of Finance and Corporate Services at Tugu Insurance, welcomed this award and emphasized the company’s commitment to continuing to build organizational agility by utilizing technology as needed. “We hope that this award can strengthen a positive work culture and environment and maintain our future commitment through product and service innovation, so that we can continue to be a reliable insurance company,” said Emil Hakim.
This award is proof that Tugu Insurance does not only focus on business performance, but also on sustainable and adaptive HR management to changing times, making it a reliable partner in the insurance industry.
The Insurance Industry Needs to Strengthen Governance and Integrity to Prevent Financial Crime
The financial services industry, especially insurance, is often faced with risk financial crime or illegal acts to obtain financial gain. Cases such as money laundering, fraud, embezzlement, etc cyber crime often color this sector. In Indonesia, several big cases in the insurance industry have emerged, such as the case Jiwasraya Insurance, Krishna Life, Wanaartha Life, Bumiputera AJB, Bakrie Life, and Bumi Asih Jaya Life Insurance.
Responding to this, Insurance Observer, Reza Ronaldo, emphasizing the importance of improving good governance in the insurance industry. According to him, the company’s focus should not only be on achieving maximum profits, but also on strengthening risk management and integrity.
“Risk management needs to be strengthened again. Let’s revive the insurance industry with good governance, without information manipulation. “If the actuary shows a certain figure, then that must be carried out,” said Reza Infobank Webinar ‘Beware of Financial Crime Modes in the Financial Sector’ in Jakarta, on August 13 2024.
Reza emphasized two important aspects that the insurance industry must pay attention to: governance and integrity. He highlighted the important role of agents and brokers in maintaining the reputation of the insurance industry, so that cases like Krishna Life and Wanaartha Life not repeated, and public confidence can increase again.
“These cases occur because of weak supervision and greed. Excessive motivation to make profits in a short time often leads to cunning and breaking the rules. “We urge all industry players to work together to fix this situation,” added Reza.
He also highlighted the need for regulatory adaptation by regulators and law enforcers amidst rapid technological developments and digitalization. According to Reza, this step is important to identify and arrest the perpetrator financial crime who often hide their identity.
“Regulators cannot make mistakes in regulations. As policy makers, we must support the efforts made by the OJK. Industry must also comply with regulations, because violating regulations will only have negative impacts. “This is a challenge for all of us to improve and do better,” said Reza.
As a practitioner in the insurance industry, Reza believes that if these things can be improved, the public’s reputation and trust in the insurance industry will grow again.
“Never violate regulations. Strengthen risk management, and make sure we educate our agents so they don’t commit fraud. Customers must be treated honestly. “In the past there might have been rogue agents who played around with premiums, but now this must be our common concern,” concluded Reza.
Source : https://infobanknews.com/pengamat-tekankan-hal-ini-untuk-cegah-asuransi-tersandung-financial-crime/
Increase in Health Insurance Premiums Reaches 30% Amid High Medical Inflation
This year’s increase in health insurance premiums is of great concern among the insurance industry. Usually, health insurance premiums increase by around 10% every year, but this year the jump of up to 30% or three times the usual rate has raised concerns. Chairman of the Indonesian General Insurance Association (AAUI), Budi Herawan, revealed that this increase was the impact of poor health insurance conditions in the previous year, where there was a price war between insurance companies offering products at affordable prices to attract more policy holders. .
However, this tariff war strategy actually caused problems this year, when medical cost inflation soared, forcing insurance companies to increase premium rates significantly. “An average increase of 20%-30% occurred in general insurance which focuses on health products. Last year, there was still a tariff war,” explained Budi to Bisnis on Wednesday (14/8/2024).
The tariff war was recognized as a bad note for the insurance industry. Even though premium collections have increased throughout this year, the number of policy holders has relatively not increased much, so the increase in income is more due to increases in insurance premium rates. AAUI noted that the collection of health insurance premiums in general insurance in January-June 2024 reached IDR 4.81 trillion, growing 16.88% annually (year-on-year/YoY).
Health insurance policy holders in the general insurance industry generally come from group participants, such as employees registered by the company. However, the price war that occurred last year did not have a significant impact on increasing the number of policy holders. “This tariff war is our red note. Do we want to continue in conditions like this? Of course not,” stressed Budi.
The increase in health insurance premiums is influenced by various factors, such as pure premiums, claims costs (burning costs), drug prices, hospital costs, and overall medical inflation. These aspects need to be considered carefully, especially considering that people’s purchasing power is increasingly weakening. Based on Mercer Marsh Benefits (MMB) Health Trends 2024 research, medical inflation in Indonesia is expected to remain at around 13% this year. For comparison, medical inflation last year reached 13.6%, far above Indonesia’s general inflation rate, which in July 2024 was recorded at 2.13% (YoY).
Chief Executive of the Insurance, Guarantee and Pension Fund Supervision of the Financial Services Authority (OJK), Ogi Prastomiyono, admitted that high medical inflation was the main factor driving the increase in health insurance premiums. “This is a trigger for insurance companies to increase health insurance premiums, so that they have sufficient funds to cover health costs for policy holders,” said Ogi.
OJK is currently drafting regulations regarding health insurance products to strengthen this business line, with the hope that the industry remains healthy and the public is not burdened by significant premium increases. “We are still in the study stage regarding the main issues and aspects that need to be regulated,” added Ogi.
The head of the College of Risk Management and Insurance (STIMRA), Abitani Taim, suggested that insurance companies look for ways to anticipate medical inflation without having to increase premiums drastically. According to him, an increase in health insurance premiums is necessary to ensure payment of claims to the insured, but companies must also pay attention to people’s purchasing power which is declining. “The strategy is that the company must be more efficient and optimize technology in its operations, so that the increase in net premiums can be compensated for by operational costs, and the increase in premium rates is not too high,” Abitani told Bisnis.
Abitani also emphasized the importance for insurance companies to offer health insurance products that truly suit people’s needs. “People will certainly prioritize their needs when spending their money,” he said.
Meanwhile, Chief Customer and Marketing Officer of PT Prudential Life Assurance (Prudential Indonesia), Karin Zulkarnaen, explained that Prudential Indonesia has also implemented an increase in premium rates in response to high medical inflation and the number of health insurance claims. “Starting August 2024, there will be an adjustment to premiums or insurance costs of 39% for Prudential Indonesia health insurance products that existed before this year,” said Karin.
Prudential Indonesia is committed to continuing to provide optimal long-term protection services to customers amidst the challenges of high medical inflation. When asked about the comparison between trends in health insurance premium income and the number of participants, Karin did not provide details. However, he said that in the first quarter of 2024, Prudential Indonesia’s premium income from traditional products reached IDR 1.2 trillion, an increase of 23.3% compared to the same period last year.
Despite Rising Insurance Claims, Commercial Insurance Premium Growth Remains Higher
The Financial Services Authority (OJK) revealed that although there was an increase in claims in the insurance industry, this was offset by premium growth which remained strong. This condition is expected to support insurance companies to continue to grow positively amidst global economic uncertainty.
Chief Executive of the OJK Insurance, Guarantee and Pension Fund Supervisor, Ogi Prastomiyono, in the July 2024 Monthly Board of Commissioners Meeting (RDKB) press conference held on Wednesday, August 14 2024, stated that although there was an increase in insurance claims, the growth in commercial insurance premiums was still showing better performance.
“Until June 2024, commercial insurance claims increased by IDR 2.42 trillion or 2.27 percent year-on-year (yoy), reaching IDR 108.90 trillion. “In the general insurance and reinsurance sector, claims even increased by IDR 4.05 trillion or 15.05 percent yoy,” said Ogi.
He added that the business line with the largest increase in claims was credit insurance, which recorded an increase in claims of IDR 2.09 trillion or 29.75 percent yoy. In contrast, claims on life insurance actually decreased by IDR 1.64 trillion or minus 2.06 percent.
Commercial Insurance Premium Growth Remains Positive
In terms of premiums, Ogi reported that until June 2024, commercial insurance premiums were recorded at IDR 165.18 trillion, experiencing growth of IDR 15.10 trillion or the equivalent of 10.06 percent yoy. “In general, even though there is an increase in claims, commercial insurance premium growth is still higher,” he emphasized.
Health Insurance Continues Positive Trend
Meanwhile, health insurance continues to show a positive growth trend until mid-2024. As of June 2024, health insurance premiums in the general insurance sector reached IDR 4.81 trillion, an increase of 16.88 percent compared to the previous year.
In terms of claims, in the second quarter of 2024, health insurance claims in the general insurance sector reached IDR 3.45 trillion, an increase of 7.04 percent yoy. Ogi explained that one of the factors driving the increase in health insurance premiums was high inflation in medical costs.
According to Mercer Marsh Benefits (MMB) Health Trends 2024 estimates, medical inflation in Indonesia is expected to remain high, reaching 13 percent this year. “This increase in medical costs is a reason for insurance companies to adjust premiums to ensure sufficient funds to cover health costs for policy holders,” he added.
OJK Prepares New Regulations for Health Insurance
Regarding health insurance regulations, OJK plans to prepare an OJK Circular Letter (SEOJK) regarding Health Insurance Products. This is done to strengthen the health insurance business line, as OJK has issued SEOJK 5/2022 concerning Insurance Products Linked to Investment (PAYDI). Currently, OJK is conducting an in-depth study of the main issues and aspects that need to be regulated in the future.
“We will continue to monitor and adjust regulations so that the insurance industry, especially health insurance, can grow well and be able to face existing challenges,” concluded Ogi.
OJK Emphasizes the Importance of Risk Management and Capital Increase in the Insurance Industry
The Financial Services Authority (OJK) continues to emphasize the importance of implementing adequate risk management in the insurance industry. OJK reminds insurance companies to carry out periodic evaluations of the assumptions used in determining premiums and premium reserves, as well as making necessary adjustments to maintain the company’s financial stability.
President Director of Staco Mandiri Insurance, Sigit Suciptoyono, explained that after the acquisition process by Capitol Group, the company immediately increased its authorized capital to IDR 250 billion, with paid-up capital of IDR 180 billion. This step ensures that the company’s equity has reached a minimum limit of IDR 250 billion, in accordance with the requirements set by the OJK.
“With this step, we ensure that the company’s equity has reached a minimum of IDR 250 billion, in accordance with the requirements set by the OJK,” said Sigit to Business on Thursday (8/8/2024).
After this acquisition, Staco Mandiri Insurance plans to carry out business synergies with companies that are members of the Capitol Group and their business partners. Capitol Group itself is a business group that has a business portfolio in the plantation, property, trade and international trade sectors.
Before this acquisition was realized, Staco Mandiri Insurance had gone through a long journey in an effort to meet the minimum capital obligations set by the OJK for general insurance companies. In mid-2015, this company was on the OJK’s red radar because it was one of six insurance companies that had not met the minimum capital limit.
However, with strategic steps taken after the acquisition by Capitol Group, Staco Mandiri Insurance succeeded in increasing capital and strengthening the company’s financial position. This step is expected to increase customer trust and ensure the company’s business sustainability in the long term.
Decrease in Life Insurance Investment Returns Reaches 29.99%, OJK Highlights PAYDI
The Financial Services Authority (OJK) reported a significant decline in investment returns from life insurance companies, which reached 29.99 percent on an annual basis (yoy) to IDR 11.46 trillion in June 2024. The biggest decline occurred in the Investment Linked Insurance Products (PAYDI) business line ), especially investment returns from stock instruments and mutual funds.
OJK Chief Executive of Insurance, Guarantee and Pension Fund Supervision, Ogi Prastomiyono, explained that this decline was largely caused by depressed capital market conditions. “Life insurance has quite significant placements in stock and mutual fund instruments, amounting to 26 percent and 14 percent of total investment respectively,” said Ogi at the July 2024 RDKB press conference held on Thursday, August 15 2024.
Ogi added that the decline in investment returns was also inseparable from the impact of slowing economic growth, which affected investment flows in the capital market. This is reflected in the decline in the Composite Stock Price Index (IHSG), which has fallen by more than six percent since the beginning of the year.
To overcome this decline, Ogi suggested that insurance companies review their investment strategies, especially stock and mutual fund instruments, and consider shifting to instruments that provide better returns.
“Insurance companies must adhere to principles liability driven investment to ensure adequate investment and timely liquidity required to pay benefits to policyholders in the future,” he continued.
Ogi also said that with current market conditions, it is possible that there will be changes in investment asset allocation in the insurance industry in the future. This adjustment is necessary to maintain company performance and provide optimal benefits for policyholders.
Private Health Insurance Options with Affordable Premiums and Complete Facilities
Having good health insurance is becoming increasingly important amidst increasing public awareness of the importance of health protection. Even though BPJS Health is a social security program that all Indonesian citizens must participate in, many feel the need to have additional protection through private health insurance.
Private health insurance usually offers broader benefits and services than BPJS Health. However, to enjoy this facility, customers are required to pay a monthly premium. For those of you who are looking for private health insurance with affordable premiums, here are some of the best options to consider:
- Sinarmas Health Insurance
As one of the largest companies in Indonesia, Sinarmas provides comprehensive health services, from inpatient care, ICU, surgery, to ambulances. Sinarmas offers very affordable premiums, starting from IDR 77 thousand per month for children and IDR 164 thousand per month for adults.
Premium payments can be made monthly using a credit card, and for those who use a Sinarmas credit card, additional free protection is available in the form of Personal Accident Insurance worth IDR 10 million per month. The Sinarmas claims payment system is also very flexible, with cashless or reimbursement options.
- Manulife Health Insurance
For those of you who are looking for health insurance with superior facilities, Manulife could be the right choice. Manulife covers room costs up to IDR 800 thousand per day, and provides outpatient coverage and dental examinations worth IDR 20 million per year. The premium for this insurance is IDR 9.8 million per year for 3 family members. Even though this premium is relatively high, the facilities offered are commensurate with the costs incurred.
- Prudential Health Insurance
Prudential offers comprehensive healthcare facilities, including inpatient, ICU, NICU, and more. Prudential’s hospitalization costs cover IDR 3.5 million per day. In addition, Prudential provides digital cards that make it easier for customers to make cashless payments at more than 500 partner hospitals, making the claims process more practical and efficient.
- Astra Life Health Insurance
Astra Life is a health insurance option with affordable premiums, around IDR 180 thousand per month. Even though this premium is relatively low, Astra Life offers quite substantial protection, including hospitalization costs of up to IDR 2 million per day and surgical compensation of IDR 10 million per procedure. For those of you who need additional protection, Astra Life also provides additional health insurance that you can choose according to your needs.
- Allianz Health Insurance
Allianz is one of the best health insurance that offers premiums starting from IDR 300 thousand per month or IDR 3 million per year. Allianz provides inpatient coverage with room fees of up to IDR 750 thousand per day, as well as special coverage for chronic diseases such as cancer and HIV/AIDS. With an extensive network of partner hospitals and complete facilities, Allianz is the right choice for those looking for comprehensive health protection.
Source : https://berita.99.co/asuransi-kesehatan-selain-bpjs/
This news is brought to you by L&G Insurance Brokers, insurance broker experienced in Indonesia.
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