The Jakarta Post
Life insurance company PT Prudential Life Assurance (Prudential Indonesia) aims to increase the number of its agents who qualify for membership of a global association of life insurance and financial services professionals, amid the persistently low insurance penetration rate in the country.
The number of Prudential Indonesia’s agents registered as members of the trade association Million Dollar Round Table (MDRT) has grown over the years. Within four years, it more than tripled from 302 agents in 2017 to 1,000 agents in 2020.
MDRT membership is recognized internationally as the standard of excellence in the life insurance and financial services business.
With that figure, Prudential Indonesia accounts for around 36 percent of the 2,745 MDRT-registered agents in Indonesia as of July 1, making it one of the 10 countries with most MDRT members. Last year, only 2,459 agents in the country were registered as members of the association.
“If we are talking about aspirations, of course, we hope the number does not stay at 1,000. By 2021, we aspire for that number to reach 1,800,” the company’s chief agency officer, Rusli Chan, said during a virtual media briefing on Tuesday.
Indonesia’s insurance penetration relative to gross domestic product (GDP) remains low. According to the latest data from the Organization for Economic Cooperation and Development (OECD), Indonesia’s insurance spending in 2018 was only 1.79 percent of the country’s GDP, lower than in neighboring Malaysia’s, where it was 4.4 percent, and much lower than the average insurance spending in OECD member countries at 8.92 percent of GDP.
A recent high-profile case involving state-owned insurer PT Asuransi Jiwasraya added to public distrust of insurance companies. Jiwasraya has been accused of mismanagement and corruption after investing most of its premium revenue from the JS Saving Plan, one of the company’s insurance products, into so-called pump-and-dump stocks.
Prudential Indonesia has more than 260,000 agents across the country, a number that is reportedly growing amid the pandemic as people look for alternative sources of income, Prudential Indonesia president director Jens Reisch said.
“We actually increased our [agent] recruitment quite significantly. Now, the number of agents is already 285,000,” Reisch noted during the media briefing.
Prudential Indonesia runs a host of capacity building programs for its agents to help them qualify for the MDRT title. Rusli explained that the company built an awareness program called Run for MDRT and provided its agents with MDRT mentorship to facilitate the transfer of knowledge between agents.
Miliana Marten, MDRT Indonesia country chair, explained that MDRT membership would give agents access to resources as well as a global network with the world’s best financial services professionals. The MDRT has more than 72,000 members from more than 500 companies in 70 countries.
“The MDRT is membership-based. To achieve MDRT membership, a high level of commitment is needed to achieve the benchmark of premium collection,” Miliana said during the same event.
To be considered for MDRT membership, agents need to collect total premiums worth Rp 453.92 million (US$31,000) within their first year. A step above the MDRT qualification is the Court of the Table (COT) qualification, given to members who collect total premiums of Rp 1.36 billion.
The highest qualification, called the Top of the Table (TOT), is given to those who manage to collect Rp 2.72 billion in yearly premiums.
Editor's note: This article has been updated to accommodate a clarification that Prudential did not just start the MDRT program in 2017.