Govt to improve climate for insurance business

Govt to improve climate for insurance business

JAKARTA (JP): The government is committed to improving the
climate for the insurance business in the country in face of
liberalization under the ASEAN Free Trade Area (AFTA) forum.

Director General for Financial Institutes of the Ministry of
Finance Bambang Subiyanto told reporters after opening the 21st
assembly of the ASEAN Insurance Council (AIC) at Sahid Jaya hotel
yesterday that the government, in cooperation with the Indonesian
Association of the Insurance Companies (DAI), is now formulating
various steps to develop the insurance industry.

He said the government will also take strict measures against
illegal practices in the industry," he said.

He explained that a good climate is important for promoting
the development of the insurance industry, considering that the
ratio of Indonesia's policy holders against the population is
still very low at only seven percent.

The ratio was only three percent five years ago, he said.

Bambang delivered a key speech yesterday at the AIC assembly,
which was attended by around 40 executives of insurance
associations from five of the six members of the Association of
Southeast Asian Nations (ASEAN) -- Malaysia, Singapore, the
Philippines, Thailand and Indonesia. Brunei's representatives
were absent at the assembly.

The meeting was intended to exchange information and
experience related to the insurance business and to seek a
standardization in insurance practices among ASEAN countries to
support the implementation of the AFTA scheme.

AFTA, which has been implemented since early this year, aims
at gradually liberalizing trade among ASEAN member countries
within 10 years.

Promotion

Sophar Lumban Toruan, the finance ministry's director for the
insurance industry, meanwhile cautioned that the progress of
Indonesia's insurance business is still left far behind other
countries in the region.

"Companies involved in the insurance industry, therefore,
should be responsible for educating the public on advantages of
the business by providing consulting and guidance on insurance,"
he said, adding that most of Indonesian people are not accustomed
to planning their future life.

He said that the ministry is now designing a new life
insurance facility which is very modest in operation, thereby
encouraging low income to use insurance services.

AIC's chairman, Armando C. Trinidad, said that many people
seem to consider insurance a non-profit business. He therefore
suggested that the industry strengthen its information campaign.

He pointed out that the ratio of policy holders against
population in the Philippines is around 40 percent.

An informed source said the policy holder ratio is 35 percent
in Singapore, 20 percent in Malaysia and 30 percent in Thailand.
(fhp)