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Jakarta Post

OJK launches micro-insurance blueprint

  • Tassia Sipahutar

    The Jakarta Post

Jakarta   /   Fri, October 18, 2013   /  12:47 pm

The Financial Services Authority (OJK) hopes a newly launched blueprint will support the marketing and implementation of micro-insurance products across Indonesia by 2016.

The OJK blueprint was launched in Jakarta on Thursday, in partnership with the Life Insurance Companies Association (AAJI); General Insurance Companies Association (AAUI); Sharia Insurance Companies Association; state banks (Bank Mandiri, BRI, BNI, BTN); state postal firm PT Pos Indonesia; state pawn shop PT Pegadaian; and state financing firm PT Permodalan Nasional Madani (PNM).

According to OJK commissioner overseeing non-banking financial industry Firdaus Djaelani, it is expected that the blueprint will help expand the micro-insurance segment in the domestic market.

Data from the OJK shows that so far the number of policy holders in Indonesia stands at 67 million people. Of that amount, about 10 million are individual policy holders and 57 million are group policy holders.

'€œCompared to the total population of 250 million, that figure is still relatively small. Many Indonesians remain uninsured, especially those with a low-income. We hope the situation will improve in 2016,'€ he said during the event.

There are more than 120 insurance companies currently operating in Indonesia. Of that amount, only 16 already market their own micro-insurance products, such as PT Asuransi Central Asia (ACA); PT Asuransi Allianz Life Indonesia; PT Asuransi Kredit Indonesia (Askrindo); and PT Asuransi Jiwasraya.

However, Firdaus said that there were no reliable micro-insurance statistics available due to differing standards among the companies. '€œThat'€™s why we also expect [the blueprint] to help companies set a common ground as it contains a set of guidelines,'€ he added.

The guidelines include a premium price and benefit limit. The blueprint stipulates that the price of a micro-insurance premium must not exceed Rp 50,000 (US$4.4) and its benefits may not surpass Rp 50 million per customer. Currently, ACA sets its average micro-insurance product price at Rp 20,000 each, while Allianz'€™ average price tag is between Rp 8,000 and Rp 9,000.

The launch also saw all parties '€” associations, banks, Pos Indonesia, Pegadaian and PNM '€” sign various memorandum of understandings (MoU), in which they agreed to join forces in marketing the products at their branch offices or sales outlets.

Pos Indonesia president director Budi Setiawan said that his company started selling microinsurance products in 2008 and that it currently collaborated with three general insurance firms, including ACA.

'€œWe are in talks with three other companies to offer their products at our branches. Hopefully, everything will be finalized before year-end,'€ he said. Pos Indonesia has more than 4,000 branches across the country.

Meanwhile, Allianz deputy CEO Handojo Kusuma said it was cooperating with rural banks and cooperatives and had more than 1.2 million customers with a total outstanding premium of Rp 11.09 trillion in 2012.

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