Indonesia: Govt is cautious over plan for insurance holding company
Source: Asia Insurance Review | Sep 2019
The government has said that it is not in a hurry to form a state owned insurance holding group.
According to the Ministry of Finance director general of state assets Isa Rachmatarwata, if something were to go wrong, there would be risks to domestic financial stability. Therefore, the government - in this case, the Ministry of Finance and the Ministry of State Owned Enterprises (Ministry of BUMN), needs time to finalise the concept of holdings.
Mr Isa said that he has not set a specific target for when the insurance holding company would be formed, given that the government would not rush its decisions on the issue.
“If you just gather companies, both BUMN, BUMN subsidiaries, and grandchildren of BUMN in one holding, but there is no enthusiasm to consolidate, then the holding will not be very useful,” Mr Isa said.
So far, he said, discussions carried out with the Ministry of BUMN were progressing. “All processes are going well,” he said.
The state-owned companies that will be part of the proposed group include Jasa Raharja, Asuransi Kredit Indonesia, Asuransi Jasa Indonesia and Asuransi Asei Indonesia. There are also reinsurance companies, namely Reasurance Indonesia Utama or Indonesia Re, and Reasurance Nasional Indonesia (National Re). A