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Private insurers unfazed by insurance scandals despite trust concerns
Private insurers have brushed off concerns that scandals involving state-owned insurance companies have hurt the industry as the sector continues to grow despite being clouded by trust issues.
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Pedestrians walk in front of the Jiwasraya Building in Jakarta on Jan. 15. (JP/Wendra Ajistyatama)
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rivate insurers have brushed off concerns that scandals involving state-owned insurance companies have hurt the industry as the sector continues to grow despite being clouded by trust issues.
Adira Insurance chief executive officer (CEO) Julian Noor said the company still experienced a premium collection growth of about 8 percent year-on-year (yoy) in 2019 despite controversies surrounding state insurer Asuransi Jiwasraya.
“This is because the problem is in a state-owned insurer while private ones face no problems. Thus, the public will be smart enough not to generalize and it will be an opportunity for private insurers to offer even better services right now to their customers,” Julian said.
Read also: Relaxed foreign ownership rule for insurers could save Jiwasraya: Experts
Julian’s statement contradicted high-ranking officials who have expressed concern that the scandal at Jiwasraya would undermine faith among the public and investors in the country’s financial institutions.
Trust issues could aggravate the already low market penetration of insurance products. Only 2.77 percent of Indonesians had some form of insurance in 2018, various insurance association data compiled by the Association of General Insurance (AAUI) showed.
