Great Eastern General Insurance Optimistic To Fulfill Minimum Equity Of IDR 1 Trillion

Illustration (Photo: Doc Antara)

JAKARTA - PT Great Eastern General Insurance Indonesia (GEGI) is optimistic that it will be able to meet the minimum equity target of IDR 1 trillion by 2028.

This is in line with the decision of the Financial Services Authority (OJK) which has determined to increase the minimum capital and minimum equity of insurance companies.

President Director of PT Great Eastern General Insurance Indonesia Aziz Adam Sattar said that this requirement was part of an effort to strengthen the insurance industry in Indonesia.

Meanwhile, the determination is contained in OJK Regulation (POJK) Number 23 of 2023. OJK will group insurance companies based on the level of capital or tiering.

For insurance companies that meet a minimum equity of IDR 1 trillion, they are included in the Insurance Company Group Based on Equity (KPPE) II.

Meanwhile, insurance companies that meet equity of at least IDR 500 billion are included in KPPE I.

Meanwhile, GEGI's premium growth in the second quarter of 2024 of 17.9 percent is approaching the industry average.

On the other hand, the Indonesian General Insurance Association (AUI) recorded an insurance industry premium growth of 18.4 percent year on year (YoY) as of the second quarter of 2024.

Likewise, Risk-Based Capital (RBC) GEGI reached 329 percent in the third quarter of 2024, far above the minimum OJK provisions of 120 percent.

"This shows GEGI's financial health is very strong. According to the results of the latest financial report, GEGI's equity has reached Rp550 billion, which has met the minimum capital requirement in 2026 in accordance with POJK 23/2023 regarding business licensing and insurance institutions," he explained in his statement, Tuesday, October 29.

As is known, the equity of insurance companies must reach IDR 250 billion in 2026 and IDR 500 billion in 2028 for KPPE I.

As well as the minimum insurance company equity of IDR 1 trillion for KPPE II.

Thus, GEGI has met the minimum equity requirements in 2028 for KPPE I.

Aziz said, GEGI is optimistic that he can enter KPPE II with a strong commitment from shareholders and organic premium growth.

In addition, Aziz said, GEGI shareholders are fully committed to being able to meet the equity requirements of IDR 1 trillion in order to continue to grow to provide comprehensive insurance protection solutions for the people of Indonesia.

"Shareholders believe that Indonesia's economic growth in the future will be very promising," he said.

Aziz emphasized that GEGI does not yet have a plan to cooperate with other companies. By entering into KPPE II insurance company, GEGI can reach a wider market by offering superior products that are more comprehensive.

However, Aziz said that the individual, retail, and micro, small, medium enterprises (MSMEs) insurance sector remains the main growth focus.

According to him, large capital is important for strengthening the insurance industry, although not everything.

This is because the insurance business is very unique with the risk selection mechanism and the spread of risk through the reinsurance mechanism.

The company must have a strong reinsurance structure in order to fulfill its obligation to pay the claims properly.

Aziz said that good Corporate Governance (GCG) or good corporate governance through good risk management will make insurance companies strong.

Meanwhile, the average insurance industry growth ranges from 10-18 percent per year. This opportunity is very promising in line with future economic growth which is expected to grow by 5 percent.

In addition, Marketing Director of PT Great Eastern General Insurance Indonesia Linggawati Tok said the company recorded a premium income of IDR 643 billion in September 2024.

This figure grew by about 28 percent from premium income for the same period last year.

Linggawati explained that the largest premiums were contributed by the Property Insurance (benefit), Marine Cargo (transporting), Engineering, Liability (cambung gugat) and Affinity (afinity) businesses.

"Great Eastern is optimistic that it can achieve the premium target by the end of this year of IDR 760 billion," he said.

Linggawati said GEGI is optimistic that it can grow above the industry average and this year it has grown by 28 percent and believes it can continue to grow 20 percent next year.

"We believe that the level of literacy and inclusion of society will continue to grow, Indonesia will become a large insurance market that continues to grow," he explained.