One Giant Reinsurance Company Coming Up

Fathan Qorib, Andin Aditya Rahman

After a strenuous review process with the Government, the Financial Services Authority (OJK) has finally appointed PT. Asuransi Ekspor Indonesia (ASEI) to be the holding company of reinsurance companies in Indonesia.

“ASEI will become a reinsurance company,” announced Firdaus Djaelani, the Head of Non-bank Financial Industry Supervision at the OJK, in Jakarta on Tuesday.

According to Firdaus, the OJK is aiming for ASEI to be the largest reinsurance company in Indonesia by the end of the year. However, he was reluctant to disclose the total capital that will be held by ASEI.

Muliaman D. Hadad, Chairman of the Board of Commissioners at OJK, added that a giant reinsurance company is needed in Indonesia to deter the flow of premiums paid by Indonesian residents to foreign reinsurance companies.

“Because if little by little they are paid overseas, it’s a pity for our premiums,” he stated.

Kornelius Simanjuntak, Chairman of the General Insurance Association Indonesia, applauded the plan to combine Indonesian reinsurance companies into one single colossal company. Kornelius also strongly believes that this will prevent the flow of premiums to foreign reinsurance companies.

“Having a giant reinsurance company is good, and a giant insurance company is also needed. It is important that these companies are financially healthy,” he explained.

However, he asserted that the reinsurance holding company will need to have an immense amount of capital of at least IDR 10 trillion.

(hot/kc)