20 top insurance firms to be rated
20 top insurance firms to be rated
JAKARTA (JP): The government plans to rate 20 of the best
known life and risk insurance companies in the country to
encourage better competition among insurance firms, an official
said.
Director General of Financial Institutions Bambang Subianto
said Wednesday that his office is currently studying a number of
indicators to be included in the rating.
"However, we cannot yet mention them in detail as we are still
studying what factors can be considered as indicators," Bambang
announced at a business gathering hosted by the Indonesian
Insurance Council.
He noted that such indicators would possibly include capital
standing, gross and net premium revenues as well as a number of
ratios which reveal strengths and weaknesses of insurance firms.
Bambang said the government has assessed 68 risk insurance
firms on the ratios of their net premium revenues to equity. From
the ratio analysis, three of them were recorded as very good, 30
good, nine mediocre and 26 poor.
Indonesia currently has a total of 94 risk insurance firms,
five re-insurance firms and 49 life insurance firms.
Bambang called on local insurance firms to improve their
professionalism and efficiency to anticipate free trade in
services.
Insurance is one of the service sectors to be liberalized
among the seven members of the Association of Southeast Asian
Nations (ASEAN) under the ASEAN Framework Agreement on Services.
"Currently the industry is safe as it is still protected.
However, we have to keep in mind that negotiations on the
services among ASEAN countries have to be completed by June 30,
1997," Bambang was quoted by Antara as saying.
Besides, under the multilateral General Agreement on Trade and
Services, each signatory country, including Indonesia, has to
bring new commitments on services by 2000. Insurance may become
one of Indonesia's new commitments.
The council's chairman, B. Munir Sjamsoedin, said local
insurance firms have to prepare themselves to face liberalization
in the insurance sector.
He suggested that insurance firms make special efforts to
improve the quality of their manpower, especially in the areas of
technical insurance skills, managerial skills, electronic data
management skills as well as market expansion. (rid)