Indonesia: Insurers expect more than US$420 mln from insuring state assets
Source: Asia Insurance Review | Mar 2018
The potential premiums that can be generated from insuring state assets could reach IDR6 trillion (US$420 million) to IDR8 trillion, estimates the General Insurance Association of Indonesia (AAUI).
The estimate is based on the total value of state assets at 30 June 2017 of around IDR2,183 trillion.
“If this asset value is multiplied by 0.3% which is the estimated premium rate, premiums could be around IDR6-8 trillion, although this is not all directly insured,” said AAUI Chairman Dadang Sukresna.
Meanwhile, the AAUI is waiting for the government to announce the insurance programme for state assets and for a consortium of insurance companies to be formed. The preparatory work is being carried out by the Directorate General of State Assets at the Ministry of Finance and the Financial Services Authority (OJK). In addition, the Finance Ministry needs time to record all assets owned.
Decisions have to be made about the type of insurance cover, the mechanisms to obtain cover, rates and the budget. The government could also set qualifications for insurers which participate in the consortium such as a minimum rating for general insurance companies.
Mr Dadang said that the government will first sort out the state property to be insured. Insurance is to be provided gradually. “But we hope at least we can start insuring this year,” he said. A pilot project might be started this year. A