Poor service hampers insurance businesses
JAKARTA (JP): Indonesia's insurance industry needs to improve on the services their companies offer, the Director of Insurance at the Ministry of Finance, Sophar L. Toruan, said here yesterday.
Speaking at a press conference here yesterday, Toruan noted that the government will take a group of 22 top executives from local insurance companies to Australia from Nov. 12 to Nov. 19 to observe and study local practices down under.
"We have to admit that Australia's insurance services are several steps ahead of Indonesia's," Toruan said.
During their week-long visit, the delegates will visit 11 insurance companies in Sydney and Melbourne and will meet with Australian State Treasurer Ralph Willis and executives of the Australian Insurance Commissioners and the Life Insurance Federation of Australia.
In addition to insurance services, the delegation, to be led by Director General for Financial Institutions Bambang Subijanto, will also brush up on the usage of computer technologies relevant to the insurance business, investment management and administration of pension funds.
"We are still infant in pension funds, and thus, our services are still below par. We hope we will be able to adopt some techniques (from Australia) to improve them," Toruan said.
He also noted that a number of Australian insurance companies will invest their money in Indonesia by establishing joint- venture firms with local partners.
They are, among others, the National Mutual Life Association of Australia Ltd. which will cooperate with National Tempo Life, MLC Life Ltd. with Simas Life, the Colonial Mutual Life Insurance Society Ltd. with an insurance firm affiliated to the Astra International.
He said insurance companies from Australia are interested in entering Indonesia as only eight percent of the country's 180 million people are insured.
To improve local insurance businesses, Toruan said, insurance companies are advised to diversify the investments of their funds.
"Most of them invest their money in time deposits. They should diversify their investments, into areas like land, real estate and capital markets," Toruan suggested. (rid)