Answering The Challenges Of Low IKNB Literacy, IFG Launches Books Related To Insurance And Retirement Funds

Photo: Doc. IFG

Choosing the right type of insurance as a protection instrument and placement of pension funds as needed and future preparations requires comprehensive understanding and information, especially regarding the risks in making these decisions.

This is increasingly complex with global macroeconomic challenges that have been full of dynamics in recent times. On the other hand, the availability of materials and information related to non-banking financial industry literacy (IKNB), especially trusted insurance and pension funds and can be used as a reference, is still very minimal in Indonesia.

These challenges encourage Indonesia Financial Group (IFG), Holding BUMN Insurance, Guarantee, and Investment in collaboration with the Institute for Economic and Community Research (LPEM FEB UI) to release the book Towards a Sustainable Future: Explore Untagged Potentials of Insurance Sector and Pension Funds.

The book launch was attended by the Head of the Department of Licensing, Special Audit and Quality Control of Insurance, Guarantee and Retirement Fund of the Financial Services Authority (OJK) Asep Iskandar, Deputy President Director of IFG Haru Koesmahargyo, Dean of the Faculty of Economics and Business of the University of Indonesia (FEB UI) Teguh Dartanto, Senior Executive Vice President (SEVP) of IFG Progress, Reza Siregar and Director of LPEM FEB UI Chairal Nuryakin, at the Auditorium of the Faculty of Economics, University of Indonesia (UI) Depok, on Wednesday 15 May.

In his remarks, the Head of the Department of Licensing, Special Audit and Quality Control of Insurance, Guarantee and OJK Pension Fund Asep Iskandar expressed his full support for OJK in encouraging literacy related to insurance and pension funds through the launch of the book. The trusted literacy reference is needed by the public to be precise, safe, and sustainable in making decisions on insurance and pension funds and for regulators in making policies.

As is known, from the Indonesian National Literacy and Financial Inclusion Survey (SNLIK) conducted by OJK in 2022, the national financial literacy rate is still quite low, which is around 49.68 percent. This has an impact on the low contribution of the non-banking financial sector, particularly insurance and pension funds to the national Gross Domestic Product (GDP).

"We also see that the studies carried out based on scientific research in this book can be a reference in policy development as well as educational programs related to insurance and pension funds to the public, to increase public inclusion through a comprehensive understanding of the best practices and risks of insurance and pension funds," he said. Deputy President Director of IFG, Haru Koesmahargyo emphasized that the IFG realizes that Indonesia's insurance and pension fund sector is currently facing challenges from the high gap between literacy rates and financial inclusion in the community. This is mainly influenced by the low public knowledge of insurance products and services and pension funds, risks and mitigation that must be owned, as well as challenges in the level of public trust in the insurance industry and pension funds.

The IFG collaboration through IFG Progress and LPEM FEB UI in the book aims to bridge the gap in knowledge and understanding in the community, so that it can optimize the potential for insurance and pension funds in Indonesia.

"This book is a form of commitment and contribution from IFG in increasing financial literacy, in line with POJK Number 3/2023 concerning Increasing Financial Literacy and Inclusion in the Financial Services Sector for Consumers and/or the Community, through innovation of thought, strategic conception, and scientific implementation steps that can be implemented by industry players or the general public," he said.

Meanwhile, the Dean of FEB UI, Teguh Dartanto, expressed his appreciation for the launch of the book to be one of the inputs in responding to challenges in the insurance sector and pension funds.

"With the presence of this book, I hope to encourage the formation of innovative and collaborative thinking in overcoming the challenges faced by the insurance sector and pension funds in Indonesia. Let's take advantage of this opportunity to gain new insights and build a strong network to create a better future for the Indonesian financial sector," he said.

The book 'Towards a Sustainable Future: Explore Untagged Potentials Asuransi and Pension Funds' consists of 21 paper from various topics related to insurance and pension funds. This book was developed by IFG Progress, the IFG think tank institution together with LPEM FEB UI by collecting the best research from industry players and students received through the call for paper mechanism at the IFG national conference in 2023.

SEVP IFG Progress Reza Siregar, explained that this book contains new studies, ideas and solutions sourced from scientific data that address various issues in the field of insurance and pension funds, including digitization of the financial sector, green economy, demographic issues, understanding of data in detecting investment risks and opportunities, and the impact of the macro economy on the financial sector.

"We are targeting more than 100 books to be distributed to university libraries throughout Indonesia as well as national libraries so that they can be widely consumed by the public and encourage appropriate insurance literacy and pension funds according to current conditions," he concluded.