The Jakarta Post
The insurance industry maintained its positive performance throughout last year despite a somewhat dire outlook following revelations of serious liquidity issues facing state-owned insurer PT Asuransi Jiwasraya, according to the Financial Services Authority (OJK).
In a statement issued on Tuesday, the OJK noted that the insurance industry in general had grown by 5.91 percent year-on-year 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 non-bank 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 Attorney General’s Office (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 totaling Rp 16 trillion (US$1.17 billion) as of January. (rfa)