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Jiwasraya’s losses from investing in questionable stocks reach Rp 13t
State-owned insurer PT Asuransi Jiwasraya has claimed that the losses it suffered from investing in several questionable stocks exceed those of social insurer Asuransi Sosial Angkatan Bersenjata Republik Indonesia (Asabri)
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tate-owned insurer PT Asuransi Jiwasraya has claimed that the losses it suffered from investing in several questionable stocks exceed those of social insurer Asuransi Sosial Angkatan Bersenjata Republik Indonesia (Asabri).
Jiwasraya president director Hexana Tri Sasongko estimated on Wednesday that the insurer suffered a loss of Rp 13 trillion (US$949.65 million) from its investments in stocks of companies affiliated with businessmen Heru Hidayat and Benny Tjokrosaputro.
Both businessmen have been named suspects and detained by the Attorney General’s Office (AGO) in the Jiwasraya corruption case.
“The majority of our investment in stocks and equity mutual funds has been impaired and decreased our investment value,” he told the press after a hearing with House of Representatives Commission VI overseeing state-owned companies and trade in Jakarta.
He added that the total losses the company suffered from investing in the two businessmen’s companies’ stocks were still being audited by the Supreme Audit Agency (BPK).
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“We will utilize the police force to collect the money [from Heru and Benny] because we don’t have the authority to take away their assets.”
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The alleged investment mismanagement in Jiwasraya has been investigated for corruption after the insurer failed to pay out more than Rp 16 trillion in matured insurance policies as of January to its customers. The AGO has named five suspects, including two of Jiwasraya’s former executives, in the case.
In the meantime, Asabri claimed that its losses from investing in similar stocks could reach Rp 11.4 trillion, higher than its previous claim of Rp 10.9 trillion last month.
President director Sonny Widjaja said the insurer, which handles the social insurance and pension funds for the National Police, the Indonesian Military and employees of the Defense Ministry, had secured a commitment from both businessmen to compensate for the losses.
“We will utilize the police force to collect the money [from Heru and Benny] because we don’t have the authority to take away their assets,” he said during the hearing.
Meanwhile, the Financial Services Authority (OJK) said the insurance industry maintained its positive performance throughout last year despite a somewhat dire outlook following revelations of serious liquidity issues facing Jiwasraya.
In a statement issued on Tuesday, the OJK noted that the insurance industry in general had grown by 5.91 percent year-on-year (yoy) to Rp 913.8 trillion in 2019 from Rp 862.8 trillion in the previous year.
Factoring in the numbers from the Social Security Agency (BPJS), the industry booked an overall Rp 1.37 trillion of
revenue.
The industry has generated Rp 281.2 trillion through commercial insurance premiums (8 percent yoy), Rp 179.1 trillion through life insurance premiums (4.1 percent yoy) and Rp 102.1 trillion through general insurance premiums.
The positive performance was supported by the industry’s finances as reflected by its risk-based capital, with the
collective capital ratio retained by general insurance and life insurance firms reaching 345.35 percent and 789.37 percent respectively, exceeding the 120 percent threshold, according to the OJK.
“This shows that the insurance industry has maintained positive performance amid efforts to rescue Jiwasraya and the subsequent legal proceedings. Jiwasraya’s insurance assets are evaluated at Rp 22.03 trillion or about 1.6 percent of the industry’s total assets,” the OJK said in the statement.
In an effort to maintain and improve the industry’s performance, the OJK said that it had committed to accelerating the country’s nonbank finance industry reforms to ensure that it would thrive and become a robust and trustworthy alternative.
It has been previously reported that Jiwasraya’s investment mismanagement case sent ripples through other companies in the financial industry.
Insurance companies, investment management businesses and even cooperatives have been reportedly having liquidity problems after the Jiwasraya revelations.
On Feb. 12, privately owned life insurer PT Asuransi Jiwa Adisarana Wanaartha (WanaArtha Life) issued a letter to its policyholders acknowledging that its securities accounts had been frozen by the AGO in connection with the office’s investigation into a corruption case pertaining to Jiwasraya’s fund management.
On Jan. 24, the AGO ordered the suspension of 800 securities accounts related to Jiwasraya as part of its ongoing investigation to uncover alleged corruption in the ailing insurer, which is suspected to have resulted in the company’s failure to repay policyholders’ claims.
