Insurance
From The Report: Indonesia 2015
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Given Indonesia’s large population of nearly 220m – which is expanding by more than 1% per annum – its growing middle class and a GDP rising at about 6% a year, the insurance sector stands to benefit from these fundamentals in the years ahead. Overall insurance company assets increased by 14.5% in 2014, according to preliminary statistics from the Financial Services Authority (OJK), and total assets have more than doubled in the five years to 2014. However, even as insurers garner more business, there will be challenges for the OJK, as it works to achieve the right balance of regulation to ensure long-term sustainability without limiting growth or worrying investors.

This chapter contains an interview with Rinaldi Mudahar, President-Director, Prudential Indonesia.

Articles from this Chapter

Overview

Demographics, economic expansion and new regulations driving insurance sector growth in Indonesia
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As with the banking sector, insurance in Indonesia is on the cusp of wide-reaching change. Given the country’s large population of nearly 250m – expanding by more than 1% per annum – its growing middle class and a GDP rising at about 6% a year, the insurance sector stands to benefit from these fundamentals in the years ahead. Indeed, at just $77, insurance density in Indonesia is less than 3% of the density in Singapore. On the general (non-life) insurance side of the business, which is smaller…

Interview

Rinaldi Mudahar, President-Director, Prudential Indonesia: Interview
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Interview:Rinaldi Mudahar How do you assess the overall development of Indonesia’s life insurance sector? RINALDI MUDAHAR: Indonesia has shown strong growth and stability in recent years, and the development of the insurance industry tends to follow this trend. In fact, the sector is becoming an important foundation of support for Indonesia's overall economic growth, because it provides long-term protection for families and enables the achievement of their financial goals. Additionally,…

Analysis

Reconsidering lowering the foreign shareholding limit in Indonesia’s insurance sector
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There is significant foreign participation in the Indonesian insurance sector, with two-thirds of life assets held by companies with some investment from overseas, according to figures from the Financial Services Authority (OJK). However, the openness of the insurance market is being reconsidered on an ongoing basis, and it remains unclear whether foreign shareholdings will need to be reduced or if full participation will be allowed. Debating Limits The new Insurance Law, passed in late 2014, did…

Analysis

Indonesia has room for private health insurers
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Already in operation for a year, Indonesia's national health insurance scheme (JKN) aims to provide cover to the entire nation by 2019, and private insurers are paying close attention. The JKN is expected to create opportunities for the private sector, as Indonesians become more aware of their insurance needs and potentially more inclined to buy supplemental cover. “The mandatory insurance scheme will not only benefit health insurers, but also the sector as a whole by introducing a large number…

Analysis

Capital requirements to drive tie-ups between local and foreign insurers in Indonesia
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Despite the talk of restrictions on foreign investment in insurance in Indonesia, international companies remain interested and active in the sector. A number of significant deals were completed in 2015, with others in the works, suggesting that the market’s potential outweighs the risk of ownership limits being put in place. For local insurance companies, capital pressures and competition in the sector are increasingly driving them towards deals with foreign insurers. While the recent international…

Analysis

Single market to lead to gradual regionalisation of insurance in Indonesia
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The ASEAN Economic Community’s (AEC) launch in 2015 is likely to have an impact on the region’s insurance industry. As the single market emerges, financial services will become borderless, products from one country will be sold in others, labour will be portable and companies will branch out into markets outside their home jurisdictions. However, the method and pace of regionalisation in the insurance sector remains open to debate. While the industry will not experience sudden shift, as financial…