he Financial Services Authority (OJK) is pushing insurance companies to invest in infrastructure projects being handled by several state-owned construction companies (SOEs).
"We have invited both insurers and construction SOEs. The latter have presented their projects to the insurers. Then they can make a consortium and invest directly or buy bonds," OJK commissioner for the non-banking financial industry Firdaus Djaelani said during a seminar in Jakarta on Thursday.
(Read also: Five SOE subsidiaries to hold IPO in 2017: OJK)
Firdaus said most of the insurers would prefer to buy bonds instead of investing directly because direct investment required more complicated calculations.
"If they want to invest directly they have to calculate the project yield and investment by themselves, but bonds are already analyzed and rated by independent rater," he said, adding that the insurance industry had around Rp 1 quadrillion in assets.
"We just want the industry to support infrastructure development. If an infrastructure project has a good internal rate of return (IRR) like 13 percent, why not?" he said. (bbn)
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