Monday 29 September 2014

Three State Insurers to Set Up Indonesia Reinsurer by Next Year



Jakarta. Three state insurance companies Jaminan Kredit Indonesia, Tabungan Asuransi Pensiun and Jasa Raharja, will put Rp 1.5 trillion ($124 million) in paid-up capital to establish Indonesia Re, a new reinsurance company, by Jan 1.
The move is part of the State Owned Enterprises Ministry’s plan to consolidate state-owned reinsurance businesses. Reinsurance companies provide insurance services for other insurers.
Wahyu Kuncoro, assistant in banking and insurance to the deputy minister at the SOE Ministry, said last week that he expected Indonesia Re would be set up by Jan. 1, and the SOEs will pay Rp 500 billion each in capital.
Indonesia Re would be a holding company for the three state-owned reinsurance firms — namely Reasuransi Indonesia, Reasuransi Nasional Indonesia and Asuransi Ekspor Indonesia — and that would make the new entity the fourth-largest reinsurance company in Asia by assets, Wahyu said.
Local reinsurance companies have relatively small assets compared to their counterparts abroad, limiting their ability to cover higher risks for local insurers.
Data from the ministry showed that Indonesia has been paying more than Rp 5 trillion each year in net premium to off-shore reinsurance companies in the past five years, contributing to the deficit in the country’s current account.
Investor Daily

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