IN­DONE­SIA: BAN­CAS­SUR­ANCE TO AT­TRACT MORE REG­U­LA­TIONS

Insurance - - INDUSTRY UPDATES -

Source: Asia In­sur­ance Re­view, 23 June 2014

Com­mis­sion-based in­come gen­er­ated from ban­cas­sur­ance has led to more banks es­tab­lish­ing part­ner­ships with in­sur­ance com­pa­nies, with many of them in­clud­ing the busi­ness in their strate­gic plans. The in­creas­ing pop­u­lar­ity of ban­cas­sur­ance has at­tracted the at­ten­tion of the fi­nan­cial reg­u­la­tors who are plan­ning to in­tro­duce more rules for this dis­tri­bu­tion chan­nel. Up to April this year, 1,074 ban­cas­sur­ance agree­ments be­tween banks and in­sur­ance com­pa­nies had been signed, re­ported the Jakarta Post cit­ing the Fi­nan­cial Ser­vices Au­thor­ity (OJK). As many as 40 banks have es­tab­lished part­ner­ships with 26 life in­sur­ance com­pa­nies, while another 67 banks have tied up with 23 gen­eral in­sur­ance com­pa­nies. Data from the OJK shows that 970 ban­cas­sur­ance prod­ucts are now on the mar­ket, 943 of which are con­ven­tional ban­cas­sur­ance prod­ucts — com­pris­ing 208 life in­sur­ance prod­ucts and 735 gen­eral in­sur­ance prod­ucts. Ban­cas­sur­ance prod­ucts with Shariah prin­ci­ples stand at 27, com­pris­ing 19 life in­sur­ance and eight gen­eral in­sur­ance prod­ucts.

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