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IFG to strengthen insurance and underwriting industry
Building a strong financial sector, particularly in the insurance and underwriting industry, is a critical issue to address in Indonesia.
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uilding a strong financial sector, particularly in the insurance and underwriting industry, is a critical issue to address in Indonesia. This will not only encourage insurers to tap into the country’s huge insurance market potential but will also spur on the highly anticipated economic recovery.
That’s why the government has established the Indonesia Financial Group (IFG), a state-owned insurance and underwriting holding company.
The group was established by Government Regulation No. 20/2020 on the extension of state capital participation to PT Bahana Pembimbing Usaha Indonesia (BPUI) on March 17. BPUI has since changed its name to IFG.
IFG controls nine subsidiaries that focus on financial and capital markets, general insurance and underwriting and life and health insurance. IFG’s nine subsidiaries are: PT Jasa Raharja, PT Jaminan Kredit Indonesia (Jamkrindo), PT Asuransi Kredit Indonesia (Askrindo), PT Asuransi Jasa Indonesia (Jasindo), PT Graha Niaga Tata Utama, PT Bahana TCW Investment Management, PT Bahana Sekuritas, PT Bahana Artha Ventura and PT Bahana Kapital Investa.
With total assets of Rp 76.2 trillion, IFG is ready to carry out its commitment to managing the insurance industry in Indonesia. IFG has managed to give insurance protection and underwriting services with a total gross premium of Rp 18 trillion. Meanwhile, the management fund of consolidated holding company has reached Rp 81.8 trillion.
Many expect IFG to become a driver of the development of the financial industry, particularly in insurance and underwriting.
IFG general and finance director Rizal Ariansyah said the establishment of IFG was based on three factors – efficiency, integrity and synergy – with the IFG playing its role of providing strategic direction to all its subsidiaries in order to achieve the goal. “We are also implementing corporate culture transformations to enhance the development of the holding organization and human resources capability,” he added.
State-Owned Enterprises (SOEs) Minister Erick Thohir hailed the establishment of the IFG. As a state-owned insurance and underwriting holding firm, the IFG serves as a vital pillar in the financial industry in Indonesia to create innovative, careful, right and useful products and services for the public.
“Certainly, as a financial institution that covers the area of investment, insurance and underwriting, IFG is expected to boost the financial industry and always prioritize the spirit of trust, competency, harmony, loyalty, adaptiveness and collaboration, which we call AKHLAK,” he said.
Transformation
Finance Minister Sri Mulyani expressed the hope that IFG could spur on the transformation of financial institutions, especially in the insurance area.
“I hope that IFG can play an important role in boosting investment and recovery in the Indonesian economy through innovative and collaborative financial products and services,” she said.
IFG is expected to implement its pivotal role and function in the national development of strong insurance and underwriting and establish a life insurance company that can give protection to all people.
In carrying out its role in supporting the economic recovery program (PEN), IFG, through a holding subsidiary, has disbursed Rp 143 trillion worth of working capital loans through the micro credit program (KUR) and Rp 8.3 trillion to micro, small, and medium enterprises (MSMEs) in guaranteed loans to more than 200,000 MSMEs.
“IFG’s presence is meant to bring changes to financial areas, especially insurance, investment and underwriting services that are accountable, prudent and transparent. They must be managed with integrity, paying attention to corporate governance, risk management, compliance and a good risk culture,” he said.
“We are also determined to strengthen the competitive edge in insurance and underwriting services and also strengthen investment in the national insurance ecosystem,” said IFG president director Robertus Billitea.
Insurance market potential
Coordinating Maritime Affairs and Investment Minister Luhut Panjaitan said the IFG reflected the government’s drive to provide comprehensive financial products and services.
Luhut added that amid the various challenges facing the insurance industry, Indonesia had huge insurance market potential that remained untapped. Of the nation’s 273 million people, only about 1.7 percent are insured. “The condition is a challenge for insurance industry players to continually expand, especially in today’s digital era. The insurance industry has to be ready to innovate and educate people about the importance of insurance as protection for the future,” he said.
“IFG provides many benefits for Indonesian people through the range of programs it offers. I hope more people will take advantage of the insurance products provided by IFG,” he said.
To strengthen its holding business and increase its services, IFG has also set up IFG Life, an insurance company that focuses on life and health services.
Looking ahead, IFG Life will accept the migration of policies from customers of the restructured PT Asuransi Jiwasraya (Persero).
IFG business director Pantro Pander Silitonga said, “IFG Life will focus on protection-based life insurance services. The company will also offer future financial planning, especially pension funds in the form of the financial institution pension funds (DPLK).”
The government has agreed to a Rp 22 trillion (US$1.49 billion) state capital injection for IFG. The capital injection will be given in two tranches: Rp 12 trillion in 2021 and the remaining Rp 10 trillion in the following year.
