Indonesia is targeting to have the biggest reinsurance company in ASEAN after a merger of Reasuransi Internasional Indonesia (ReIndo) with PT Reasuransi Indonesia Utama (Indonesia Re).
“With total assets of IDR6 trillion (US$447 million) after the merger, Indonesia will have a large and sturdy reinsurance company that makes IndonesiaRe the largest reinsurance company in ASEAN,” the President Director of IndonesiaRe, Frans Y Sahusilawane, said.
A merger agreement between ReIndo and IndonesiaRe was signed last week, with the ceremony witnessed by the Deputy Minister of State-Owned Enterprises for Financial Services, Survey and Consultants, Gatot Trihargo, and the Director of the Chief Executive of the Finance Service Authority, Firdaus Jaelani, reported Antara News.
According to Mr. Frans, the merger process was initiated through the establishment of a subsidiary company, PT Reasuransi Syariah Indonesia, in order to transfer ReIndos reinsurance business portfolio.
After the merger, IndonesiaRe will run reinsurance businesses, which will be supported by two subsidiaries, namely Insurance Asei Indonesia, in charge of general insurance, and Reasuransi Syariah Indonesia which are engaged in Shariah reinsurance.
The stronger national reinsurance company is expected to reduce the capital outflow of reinsurance premiums, which are estimated at IDR20 trillion annually. The goal is to reduce the current account deficit.
“The potential of the reinsurance market in Indonesia is very large in terms of premiums, which are in line with Indonesia’s gross domestic product and penetration rates, that are still lower than other ASEAN countries, such as Malaysia, Thailand and Vietnam,” Mr. Frans said.
The national reinsurance company will target a premium income of about IDR9 trillion by 2017, up from premiums projected for 2016 of about IDR6 trillion.
http://www.asiainsurancereview.com/News/View-NewsLetter-Article?id=36306&Type=eDaily
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