“ The economic policy packages have not been tailored to the insurance industry aside from it being a populist measure. ”
Asuransi Sarana Lindung Upaya is one of the pioneers for credit life insurance even though we are a general insurance company. We are based in Semarang in which we are considered as the only general insurance company whose headquarter is not in Jakarta. In fact, one of the company’s founders is Bank Pembangunan Daerah Jawa Tengah which is a leading regional development bank in Central Java. At the time, the then-Governor of Central Java Mr Soepardjo Rustam and his business partner had a vision to establish an insurance company which came at a time of exponential credit growth due to banking deregulations from 1988 – 1992. Because our company was founded in 1988, Sarana Lindung Upaya rode the wave of credit growth. Our company’s target market at the time was civil servants in Java and Bali in which the company focused on providing loans to teachers. It was only after the Asian Financial Crisis in 1998 that the banking industry shifted their concentration and focused more strongly on offering consumer loans.
The company endured difficulties in 2010, but fortunately, Sarana Lindung Upaya has overcome its past hardships and we have steadily grown for the past 1.5 years due to rigorous support from the Financial Services Authority particularly for data management. Although the industry continues to grow, we are analysing the condition to determine whether it has reached a sunset mark.
Going forward, we will be bringing our attention back to the middle-class in which we are aiming to meet their insurance needs. As such, Sarana Lindung Upaya will focus to cater to the demand of the middle-class in burgeoning cities as well as mid-sized companies. In terms of cities, SLU is looking to tap into cities that have a population of 500,000 to no more than 2 million people. The company’s specialised focus on the middle market segment is because of their vulnerability to poverty should natural disasters or accidents occur thus they need better protection. Indonesia’s GDP is expected to reach 13,000 trillion IDR in 2017 in which the Java region will encompass approximately 60% of that percentage hence our continued concentration in this region.
The insurance industry is easily impacted by what happens to other industries and therefore our industry will grow if growth also occurs in other industries. General insurance is especially affected by the growth of industries because we manage the risk management for businesses and individuals. As such, the economic policy packages have not been tailored to the insurance industry aside from it being a populist measure.
However, I believe that there needs to be clarity of the regulations from the government as this has been voiced by a number of insurance players. Until today, there are numerous companies that fail to comprehend some of the government’s regulations even though they make an effort to comply with it. Moreover, the government must be able to enforce the laws and regulations that they have put in place in order for every individual to abide by it. Hence there needs to be a streamlined process in establishing clarity with regulations so as to enforce it with ease. It is important to remember that the insurance industry requires some of the strictest law enforcement regulations in comparison to other financial institutions. Lack of public awareness on insurance is also an area that must be improved upon especially from the middle-class.
I believe that the insurance industry should actually grow by more than two and even five-fold in the coming years. There are immense growth opportunities for our industry should Indonesian society manage their spending better by putting it in resources that support their health and lifestyle. I can foresee this greater awareness to continually rise in the future hence I am optimistic that in the next five years, our industry will grow by 100%. Our industry should also focus on innovation by creating new products, improving services, and diversifying distribution channels which I believe will increase the insurance industry’s growth.
We are eager to establish partnerships with companies that are ready to offer benefits other than capital such as expertise. Based on our experience, companies are only able to offer capital in which they would also try to take advantage of the local market. Because SLU does not operate solely to capitalise on the domestic market, we insist on working with partners that share our company’s interest of developing Indonesian society. Hence areas of synergies that we are interested in include technology transfer and know-how that will be relevant to local society.
Thus while SLU remains open-minded to working with overseas companies, we are also well-aware of the areas that can be further developed by our company. As such, we have implemented several measures to improve the skills of our human capital such as by honing in on their English-speaking abilities.
Asuransi Sarana Lindung Upaya has entered an era of improving our products and service standards which will require two to three years of to fully develop. The most important message that we would like to convey is that our company is here to serve the middle-class as well as mid-sized companies because we want to be remembered as a mass market insurance provider in rapidly growing cities. We are here to extend our hand so as to protect people’s assets, properties, and health in order to prevent them from experiencing poverty. At Asuransi Sarana Lindung Upaya, we aspire to provide stability to all our customers because we believe that it is important for people to enjoy life.