State-owned health insurance firm PT Askes is hoping 40 million of state-owned Bank Rakyat Indonesia'€™s (BRI) clients will join its health insurance program (JKN) when the company becomes the healthcare sector'€™s Social Security Provider (BPJS) in 2014.

Askes signed a memorandum of understanding (MoU) with BRI in Jakarta on Friday, in which the latter agreed to provide banking to JKN users. The users will be given a virtual account number that can be used at any BRI automated teller machine (ATM) or branch to pay the insurance premium.

'€œBRI has up to 40 million customers and we hope all join the program, we will cooperate with the bank specifically serve informal sector workers,'€ Askes finance director Purnawarman Basundoro said, adding that his company would use the bank'€™s existing system to support the program.

BRI is the third state-owned bank to cooperate with Askes'€™s JKN program, following Bank Mandiri and Bank Nasional Indonesia (BNI).

'€œThe next step is to work with BTN [Bank Tabungan Negara] and private banks, but our current priority is to get all state-owned banks to join and provide financial services,'€ Purnawarman said.

Askes president director Fachmi Idris said that the company would also partner with other non-financial institutions, such as post offices and pawn shops.

'€œThe most important thing is partners that operate a large number of branches across the country, so that people can easily access the program,'€ he said.

Askes has been appointed as the implementing agency for the BPJS Law, which will take effect on Jan. 1, 2014, as mandated by the 2004 National Social Security System (SJSN). The entire population will be covered by the JKN program by 2019.

At the moment, Askes serves around 16 million customers, consisting of active and retired civil servants, retired Indonesian Military (TNI) officers and police officers. When JKN is implemented in 2014, Askes estimates it will have 125 million and will reach 250 million in 2019.

In terms of premium income, Purnawarman estimated that Askes would reap Rp 11 trillion (US$1.1 billion) this year, up 4.9 percent from last year. Due to higher health claims, the net profits by year-end are estimated to be '€” Rp 800 billion '€” 17.8 percent lower from last year.

Separately, BRI finance director Achmad Baiquini said the bank had not set a financial target for the
partnership.

'€œThis is more about cash management. We would like to know more about the JKN program first,'€ he said, adding that he hoped the partnership would generate more income for BRI.

Meanwhile, Achmad said that BRI planned on adjusting its interest rates to accommodate the recent hike in Bank Indonesia'€™s (BI) benchmark rate.

'€œWe have not come up with an exact figure yet. We will use our current liquidity state to determine the new amount and also check out what our competitors do,'€ he said.

BRI'€™s interest rates currently stand at 9.75 percent for corporate loans, 11.5 percent for retail, 19.25 percent for micro, 10 percent for mortgage and 12 percent for non-mortgage consumptive loans.

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