Effective from 2023, SEOJK PAYDI regulates three main aspects of a unit link product: marketing, product transparency and unit link asset management. With the improvement, the public is expected to better understand and reap the benefits of unit link products.

In response, PT AIA Financial (AIA), Indonesia’s most trusted insurance company, launched AIA Bahagia Bersama as the first AIA unit link insurance to fulfill the requirements set by SEOJK PAYDI No. 5/2022.

“We welcome SEOJK PAYDI No. 5/2022 for the protection of every party involved, from corporations, sales forces and especially to our customers. It is manifested through the launch of AIA Bahagia Bersama as our first unit link insurance product that has been authorized as up-to-standard according to the new regulation,” said AIA president director, Sainthan Satyamoorthy.

“AIA’s leadership in product development is supported by in-depth understanding of our customers’ needs in ensuring that our product quality is considered satisfactory according to requirements set by regulators,” he added.

Previously, AIA had also implemented several SEOJK regulations such as zero illustration in May 2022 to display possible investment fluctuations in unit link products and product insurance costs of basic and additional insurance products in a transparent manner, according to Sainthan.

“We have recorded the unit link product agreement for AIA and appreciate the steps it has taken as a life insurance company that adopted SEOJK’s requirements for its unit link products early,” said OJK institutional and non-bank financial industry (IKNB) director Asep Iskandar.

“OJK hopes that it will be followed by other life insurance companies as the protection of customers must be the main priority in business operations. Surely, this will lead to the creation of a more conducive industry climate,” ASEP added.

For AIA Bahagia Bersama products, the acquisitional costs have been adjusted to 40 percent for the first three years, 20 percent for the fourth until sixth year and 5 percent for the seventh until ninth year. Other benefits include a protection period that extends to 99 years with a sum assured starting from Rp 100 million (US$ 6631.19) or at least five times the basic yearly premium.

AIA also made innovations in unit link insurance sales processes through the unit link video recording feature, which has been integrated with sales tools so customers can obtain the information they need regarding a unit link product with benefits delivered in a fair and transparent manner.

The company is also consistent in perfecting its marketing process by focusing on the needs of customers or needs-based selling. This is demonstrated by the use of two digital tools, including iPosX, used by AIA sales forces and supported by the iNeeds feature that enables agents to market their products interactively and informatively to suit customers’ needs.

AIA Bahagia Bersama is also linked with AIA Vitality, a program that motivates a healthier lifestyle. Offered rewards cover premium discounts in the form of acquisition cost discounts and increasing yearly cash back in accordance with a customer’s AIA Vitality status.

“Looking at the public’s keen interest in unit link products, we are confident that AIA Bahagia Bersama will garner a positive response. Through this product, we will continue to make progress in the life insurance industry. To us at AIA, customer protection is always the main priority,” explained Sainthan.

According to the Indonesian Life Insurance Association (AAJI), the public demand for unit link products is considerably high. AAJI data revealed that unit link products dominated the total life insurance industry premium income with 57.7 percent in the third trimester of 2022, while the remaining 42.3 percent derived from traditional insurance products.

“AIA’s move in launching a unit link product that adheres to the SEOJK PAYDI will hopefully help the public in choosing a unit link product that focuses on their needs and help them recognize product benefits fairly and transparently,” said AAJI management board chairman Budi Tampubolon.

“In addition to its protection function with investment benefits, unit link products contribute to Indonesia’s fundamentals to accelerate economic growth through the positioning of proper investment instruments,” he added.

Therefore, AAJI concluded that the regulation would not discourage people’s interest in unit link products or even burden the customers.

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