Rogue Business Partner

The quality of your decisions and the success of your business overall are deeply affected by who is on your team. A bad business partner can affect your success in all the wrong ways – and it’s not always obvious when your partner is bad for business.

BEFORE YOU ENTER INTO A BUSINESS PARTNERSHIP - What’s the best tip on how to deal with a bad business partner? Don’t go into business with them in the first place. Going into business with someone should not be a decision you make lightly. Just because you’re friends or you’ve done business with a person in the past does not mean they’ll make a good partner in business. Remember, this is one of the biggest decisions you’ll ever make and it will pay off in the end to perform your due diligence and ensure you’re choosing the right partner.

SIGNS OF A BAD BUSINESS PARTNER - Bad business partners come in all shapes and sizes, from complainers to reluctant communicators to outright liars. While it’s sometimes obvious that you have chosen a bad business partner, most of the time the signs are subtle and progressive. If you simply have different values but there are no concrete problems, it can be harder to recognize that you’re in a bad business relationship. Here are some of the most common signs of a bad business partner.

THEY’RE NOT SOLUTION-ORIENTED - If your business partner seems to always have a problem but never a solution, that’s a bad sign. Everyone needs to vent from time to time – that’s a part of being human. But if that’s all your partner does, you may want to toss them a hint about the power of positive thinking. It is possible for them to change their mindset, if they are willing.

THEY HAVE FINANCIAL “SKELETONS IN THE CLOSET" - We’ve all made some questionable financial decisions, and we’re not saying that anyone who has done this will be a bad business partner. But a long, poor credit history, previous bankrupties or being banned from running a business are big red flags. Also, be aware of other projects they have their hands in currently – even successful ones will give you an idea of the type of business partner they will be. Your business partner should openly disclose any past business failures or successes to you. If you unearth something they’ve been hiding, this could be an indication that you’ve chosen a bad business partner. Experiencing setbacks is quite common for entrepreneurs and they can even be positive tools if the person can learn how to turn those set backs into success. However, if your partner is hiding or lying about these setbacks, it’s one of the signs of a bad business partner.

YOU HAVE DIFFERENT VALUES - You don’t need to have the exact same values to have a good business partnership. In fact, different values and perspectives can be a good “yin and yang” to a partnership as long as communication is open and you understand which communication style your partner has. In fact, sometimes differences in your partner can be your greatest asset and is no way an indication of a bad business partner. But there are two areas you should agree on: finances and the type of work you accept. If you find yourself fighting over things like expenses and bonuses, or if one person wants to accept a lot of pro-bono work while the other is totally focused on money, that can spell doom for your partnership. Shared vision is important, as is agreeing on how to achieve that vision. If you’re too far apart on these issues and neither of you is willing to budge, it’s probably time to look at options to go your separate ways.

THEY WON’T SIGN A PARTNERSHIP AGREEMENT - Partnership agreements, as mentioned below, provide a roadmap for a partnership and are useful whether you are dealing with a good or bad business partner. It maps out partners’ roles as the company grows and what happens when it becomes successful; it also maps out an exit xtrategy. should the partnership go sour, helping you to answer the question of how to get rid of a bad business partner. If your partner won’t sign an agreement, it could be an indication that they have something to hide or that they’re already thinking of ways to get out of the business. Neither of these is good news for the future of your company and you should take it as one of the signs of a bad business partner. If your partner won’t sign an agreement, look elsewhere for a different partner.

THEY DON’T COMMUNICATE - Lying and mood swings are obvious signs of a bad business partner. But even things like taking a long time to respond to emails or phone calls, not answering questions directly or giving incomplete answers are all signs that your partner isn’t a good communicator, which could mean trouble for your business. If your business partner can’t communicate with you, it’s very likely they will also have other corporate communication issues. This could involve poor communication with clients, vendors or the community and could hurt your company reputation.

YOUR SKILLS ARE UNEQUAL - If your partner has a different skill set than you, it certainly doesn’t mean you have found a bad business partner. You don’t need to have the same skills – in fact, you shouldn’t have the same skills – but you must have about equal experience and skills that complement one another. Tenacity and working hard are great qualities, but they won’t be enough if your partner’s skills don’t complement yours. One person might do finance, and the other marketing. One person might be a “creative type” and the other an operations wizard. All of these can create a unique synergy that helps your business thrive and become talkably different. Just beware that one person isn’t putting in a lot more work than the other or that one partner’s skills aren’t carrying the business and landing the majority of the clients. This can breed resentment and can also mean that both partners aren’t putting in the same effort.

YOU’RE DOING ALL THE WORK - If your skills are balanced but your work ethic isn’t, that’s also a problem. Your business partner doesn’t have to be a workaholic, but if you’re putting in 15-hour days while they sit on the beach in Cancun, that could spell trouble. Or maybe your partner seems to work just as hard as you – but you’re still picking up the slack. Being busy isn’t the same as being productive and if you’re experiencing trouble in this area, it’s time to have a talk. If your partner can’t seem to increase their productivity, t might be time to say goodbye.

HOW A BAD BUSINESS PARTNER HURTS YOUR COMPANY - As an entrepreneur, your reputation is everything. When you have a bad business partner, your reputation will suffer. Depending on what the issues are, a bad partnership could lead to loss of clients, a toxic work environment and an inability to find ways to increase profits. If your partner is unethical or engaging in fraudulent behavior, it could even mean fines or legal action against your company. No matter what the extent of the problem is, if you’re not working well with your business partner, it will negatively affect the success of your company. If you’re unable to find effective ways for how to deal with a bad business partner and fix the situation, it’s time to find ways to get out.

HOW TO GET RID OF A BAD BUSINESS PARTNER - Getting rid of a bad business partner can be a frustrating and time-consuming process. If you’ve thought ahead, you’d have an exit agreement laid out at the beginning of the partnership. This is like a pre-nup for businesses and specifies how either party can get out of the partnership. If you don’t have an exit agreement, getting rid of a bad business partner is more difficult – but it’s still doable. No matter what method you choose, consult with an experienced business lawyer before you take any action. Here are some ideas on how to get rid of a bad business partner.

BUY THEM OUT - If you’re making good money, buying out your bad business partner can be the best route. Your partner may walk away with a big chunk of change, but in the long run, it will be best for the business. If you didn’t have a buyout plan in your initial partnership agreement, negotiations may be tricky and require a lawyer. And if your partner doesn’t want to sell, you can propose that they buy you out. Your only other option is to file a lawsuit, which is a long and expensive process with an uncertain outcome. If you really want to part ways with a bad business partner, you may have to be the one to walk away.

COME UP WITH A ROYALTY AGREEMENT - Royalty deals are a great option for companies that have created a product. They’re sometimes written into the partnership agreement as an exit strategy for partners who provide the “creative genius” behind a product but aren’t interested in the day-to-day operations. If your partner helped to create a product, but now seems to have checked out or isn’t interested in running the business, royalty deals are typically a win-win situation.

DISSOLVE THE PARTNERSHIP - Are you early in the start-up process? If so, how to get rid of a bad business partner could be as simple as just walking away. If you haven’t started making money and don’t have a brand following or any products on the market, it’s easier to cut your losses now. This is also an option if you are in a very stressful position with a bad business partner and can’t find any other options. If your partner is going to run the business into the ground, you might as well get out while you can. Starting a business involves some level of risk, so you can consider it a lesson learned and use it to make smarter decisions in your new venture.

The signs of a bad business partner aren’t always obvious, but remember to listen to your gut – and use your head, not your heart. You may like your business partner as a person and even as a friend, but in the end, the goal of any business is to make money. 

Jiwasraya Restrucured And Rebranded

State-owned insurance holding firm Indonesia Financial Group’s (IFG) life insurance subsidiary, IFG Life, is expected to focus on protection-oriented insurance in a bid to avoid the mistakes of ailing state-owned insurance company PT Asuransi Jiwasraya, an executive has said. 

IFG business director Pantro Padner Silitonga said on Tuesday that the subsidiary would focus on offering conventional insurance products, including life insurance, health protection and a pension fund, instead of investment-linked products, to minimize future risks. 

“As a state-owned insurer, it’s important for us to restore the original insurance business model of protection,” he said. 

Earlier this month, the government and House of Representatives agreed to disburse a Rp 22 trillion (US$1.49 billion) state capital injection through PT Bahana Pembangunan Usaha Indonesia (BPUI), now known as IFG, to establish IFG Life and save Jiwasraya. Jiwasraya is embroiled in a corruption and money laundering case following its failure to pay out Rp 18 trillion in matured policies due in May to its policyholders. 

The Attorney General’s Office (AGO) accuses Jiwasraya of investment mismanagement when it invested its premium revenue from the JS Saving Plan, one of the company’s unit-linked products, in pump-and-dump stocks. 

Hence, IFG Life’s protection model product contrasts with Jiwasraya’s past products that promised high returns. Jiwasraya’s JS Saving Plan offered a return of between 9 and 13 percent, almost twice the return of 5 percent to 7 percent offered by time deposits. 

The Financial Services Authority (OJK) data from 2018 confirmed that investment-linked products, such as unit-linked or endowment products, accounted for about 90 percent of Indonesia’s life insurance industry’s gross written premiums. 

However, Pantro said he believed IFG Life would was able to compete with other life insurers in the country with the company’s protection-oriented products. “We’ve seen increasing awareness for health protection since the COVID-19 pandemic hit, so we believe we can even be a pioneer in providing protection in the country,” he said. 

The new life insurer aimed to attract customers with affordable premiums and planned to partner with the Health Care and Social Security Agency (BPJS Kesehatan) to ensure better services, he said. 

Pantro also stated that IFG Life would prioritize investment in low-risk assets, such as money market or fixed income assets, before investing in the equity market, to ensure that the company can manage its assets prudently. “We don’t want to repeat mistakes of the past,” he said. “From now on, our assets will be managed to match our liabilities to prevent default.” 

IFG Life also expects to utilize the state-owned enterprises (SOEs) ecosystem to market its products during its early days of operations. Pantro said the company would use the business-to-business (B2B) scheme with other SOEs by providing group policies for their employees before expanding to the general public. 

However, experts criticized the new life insurance firm’s strategy. Institute of Development on Economics and Finance (Indef) economist Bhima Yudhistira said selling insurance products to other SOEs would only worsen the competition among state-owned insurance firms. “This goes against the spirit of the insurance holding itself, which is to maximize the insurance industry’s potential in Indonesia,” he said. Instead, Bhima suggested that IFG should immediately sell its products to the general public due to the low life insurance penetration in the country. 

The life insurance industry penetration stands at 1.1 percent of gross domestic product (GDP) as of July 2020, according to OJK data. Insurance expert Irvan Rahardjo echoed that sentiment, saying IFG Life should eye millennials as clients through digitalization, because many state-owned financial firms already had their own life insurance firms. 

Meanwhile, Center on Reform of Economics (Core) Indonesia economist Piter Abdullah said the company should focus on maintaining good governance to avoid repeating Jiwasraya’s mistakes. “Jiwasraya’s main mistake was reckless fund management that wasn’t based on good governance,” he said. 

“IFG Life should not be against investment-linked products. What they should do is put good governance forward and have no tolerance in any sort of procedural violations.”

OJK Latest Circular - Life Insurance

The Indonesian Financial Services Authority ("OJK") has issued a circular letter on marketing of insurance products.

Under this new circular letter, insurance companies in marketing their products online will have to be registered as electronic system operators in Indonesia. Insurance companies that engage corporate agencies should also formalize their distribution partnerships with the corporate agencies since corporate agencies are now regulated by the OJK.

Notable provisions under Circular Letter No. 19 of 2020

The OJK has issued Circular Letter No. 19 of 2020 on Marketing of Insurance Product ("Circular Letter No. 19 of 2020"), which is an implementing regulation of OJK Regulation No. 23 of 2015 on Insurance Products and Marketing of Insurance Products ("Regulation No. 23 of 2015"). Circular Letter No. 19 of 2020 has come into effect. Insurance companies have one year after 2 October 2020 (i.e., until 2 October 2021) to make their business activities conform with the requirements under this implementing regulation.

Notable provisions under Circular Letter No. 19 of 2020 are as follows:

• Insurance companies must obtain prior approval from the OJK if they wish to enter into any insurance distribution agreements with: (a) banks, (b) branchless banks, or (c) non-bank distribution partners, if the insurance company's insurance products will be distributed through the relevant non-bank distribution partners' digital channels.

With respect to item (c), an insurance company is not required to obtain prior approval from the OJK if its insurance products will only be distributed through the relevant non-bank distribution partners' non-digital channels (e.g., physical branch offices or stores). This requirement clarifies an unclear provision under Regulation No. 23 of 2015 on insurance companies being required to obtain approval from the OJK if insurance companies enter into insurance distribution agreements with non-bank distribution partners.

• Circular Letter No. 19 of 2020 provides broader means for insurance companies to market and promote their insurance products. For example, social media platforms are now explictly included as one of the permitted marketing channels for insurance companies to promote their insurance products.
• Insurance companies that offer and market insurance products through their own websites and/or applications (e.g., mobile apps) must be registered as electronic system operators with the Ministry of Communication and Informatics.
• Circular Letter No. 19 of 2020 explictly mentions telemarketing scripts as one of the available personalized and tailored product offering activities. This is important as, given the social distancing protocols, there are more and more insurance products being offered by way of telemarketing or personalized calls (video calls or audio calls).
• Circular Letter No. 19 of 2020 formalizes requirements on anti-churning, anti-pooling and anti-twisting in the context of agency recruitment (direct marketing through insurance agents). Previously, these requirements were regulated by industry associations.
• Circular Letter No. 19 of 2020 requires insurance companies to clearly mention any commission rates payable to brokers (or other distribution partners) on an insurance product's product summary provided to customers.
• Circular Letter No. 19 of 2020 requires a legal entity that houses or employs insurance agents (i.e., corporate agencies: (a) to be registered with the OJK, (b) to only have a partnership with one insurance company, and (c) not to have another partnership with another insurance company that has the same line of business as the insurance company the corporate agency has a partnership with. These are new requirements. In brief, corporate agencies are now regulated by the OJK.
• On non-bank distribution partners, Circular Letter No. 19 of 2020 now clarifies the parameters of a reference business model (model bisnis referensi), i.e., the non-bank distribution partner: (a) should only provide approved marketing kits to customers, (b) should not provide any information to customers on insurance products' terms and benefits, (c) should not assist in activities relating to premium payment and product underwriting/issuance processes, and (d) should not assist in any insurance claim processes.
• The Indonesian language must be the prevailing language if there is any inconsistency between the Indonesian language and the English language in any insurance distribution agreement (including bancassurance agreements).

Adapt And Change In Covid Pandemic

Covid19 pandemic has created enormous changes in the workplace. Regardless of their jobs, employees needed to adapt rapidly to massive changes ranging from working remotely to changes in operations and fulfillment. But job skills were changing even before the pandemic.

The number of skills required for a single job was increased by 10% per year. One-third of the skills listed in an average 2017 job posting would not be relevant by 2021. Role-based skills planning wasn’t helping organizations develop the right employee skill sets. Grouping unrelated skills doesn’t build the skills that will create competitive advantage.

Several experts have ideas about what those necessary skills of the future will be. As organizations continue to operate in a pandemic and plan for the future, here are some of the essential skills that employees will need:

SELF DIRECTION - In the midst of so much change, employees are going to need to take ownership of their roles and be highly self-directed, much like entrepreneurs within their organizations. Employees, especially at the entry-level, are going to increasingly need “to captain their own careers, [and have] a sort of DIY kind of hacking mentality.”As roles and organizations quickly evolve, the traditional training methods to develop necessary skills don’t exist in the same way. Employees are going to have to be active participants in identifying the skills, resources, and support they need to do their jobs and collaborate with their companies to get them

DIGITAL CAPABILITIES - many companies had accelerated digitization. Employees are going to have to be comfortable with digital technologies. Employees are not only going to need to be comfortable using digital technologies, ranging from collaboration software to videoconferencing, but they’re also going to need to accept its role in evaluating metrics. Analytics was the number 1 area of digital investment for HR executives in a recent PwC survey. This becomes more important as employees work remotely and workforce management can be more challenging. HR leaders and managers will be using tools to measure productivity. But it’s also important to remember that user experience is often a priority in such tools. As they become more ubiquitous, they will also likely be more seamless and easily integrated into workflows.

EMPATHY - The ability to understand the challenges other employees and organizations are facing and help management—in other words, empathy—is also a skill that employers seek and need. That’s helpful for everybody, not just the people who are trying to make their way through the chaos.

COMMUNICATION MANAGEMENT - Communication skills have always been critical and in-demand employee skills. These skills now need to extend across platforms. The rise of videoconferencing and collaboration platforms requires new skills. You have to be better with your words, you have to use brevity and levity to be successful getting thoughts and concepts across in an effective and efficient way. And you also have to know when to use which platform and how to use video, audio, and digital communication in ways that don’t create more negative outcomes, such as zoom fatique or lack of engagement. 

ADAPTABILITY - As many workplaces evolve to hybrid models or have other significant changes in how they operate, adaptability is an increasingly necessary skill. Being able to keep functioning, even when you’re a little uncomfortable, is important in a time when so many things may be in flux. Taking on stretch roles or taking on new challenges can help “build the adaptability muscles. You still need to be able to germinate that spark of innovation and produce results and be productive for the organization. But you may need to find new ways to collaborate virtually or achieve results when uncertainty or obstacles lie in your path.

MOTIVATION SKILLS - There is a series of dimensions that are increasingly important for workplace success. In addition to the intellectual ability to do the job, ability to adapt to change, and communication skills, motivation and persuasion also play a big role. An employee might be the greatest risk-taker—a very important one of the capabilities that lives within that dimension of change capabilities—but if he/she part of an organization that is not really ready for being bold in the face of ambiguity, then he/she is going to be a bit on my island by him/herself. Being able to both self-motivate and inspire others to see your vision, could be the antidote to inertia in the face of uncertainty.

Even as the new norms of work emerge, being able to adapt to change, find solutions, communicate, and persuade are skills that aren’t likely to become obsolete.

Toxic Employees

The workplace is a delicate balance. Your employees each have their personalities and behaviors that contribute to your overall company culture. When you have a toxic employee, that toxicity can seep out and impact their co-workers and your business. 

Best-case scenario: A toxic attitude can put a damper on all things business success, including productivity, employee morale and even your employer brand. Worst-case scenario: An employee's bad attitude can lead to drops in customers, a ruined business reputation, high employee turnover and lost money. 

Dealing with a toxic employee is never easy. But for the sake of your business, you need to address it at some point. 

The 7 types of toxic employees - Your employee may fall under one or more than one of the following categories of toxicity. Look for signs that might indicate you have one of these kinds of employees running rampant in your small business.

1. The bulldozer - Bulldozers bulldoze their way through other peoples' opinions and thoughts to get their way. They may interrupt their co-workers or constantly argue against what others say. Sometimes, bulldozers are loud. Sometimes they correct people using humor. Whatever the tactic may be, a bulldozer's toxic traits may seep into your workplace. Keep an eye out for these top bulldozer traits:

1. Aggressive
2. "Strong personality"
3. Always right
4. Disruptive  

2. The passive-aggressive employee - Is someone who doesn't speak their mind when they're upset. Instead, they indirectly show that they're not happy about something. Someone who is a passive person may be more inclined to bottle their feelings and avoid taking action. When there's conflict, they may get frustrated and display passive-aggressive behaviors. This can be very toxic for the workplace. They're unhappy with the task, but instead of telling you directly they make snippy remarks or procrastinate on doing the task. Here are a few quick facts about the passive-aggressive one:

1. Avoids direct conflict
2. Bitter or snarky 
3. Backhanded comments 
4. Puts off doing things they don't agree with 

3. The complainer - The person who thinks there's always something wrong. So, instead, you let it go until the negativity builds and builds. But that building negativity has to go somewhere, and often it's into the rest of your team and your company culture. Here are some signs that you've got a complainer on your hands:

1. Negative
2. "Woe is me"
3. Never happy
4. Nothing can go right  

4. The knowledge hoarder - The desire for job security can be a dangerous thing. Employees who want to secure their jobs may decide to keep processes and business-related knowledge to themselves. But successful businesses thrive on the flow of open communication, shared knowledge and collaboration. A knowledge hoarder isn't just detrimental to your team's morale –they're a liability to your company's success. What happens if they leave? Where does all that hoarded information go? Here are some undeniable indicators of a knowledge hoarder:

1. Anti-team players 
2. Have independent processes 
3. Attention-seeking
4. Insecurities about work 

5. The prideful one - An employee who thinks they know it all? A prideful employee is easy to spot. Like the bulldozer, they are "always right." And if they're wrong, they're slow to admit it. Pride can be a dangerous thing. Here are some prideful employee red flags:

1. Slow to apologize
2. Quick to brag
3. Always right
4. Unresponsive to criticism 

6. The gossip  - Your employees likely enjoy talking with their fellow co-workers. Maybe they talk about work or their personal lives. Or maybe they're dishing about other employees, your business's status or even you. Gossip is often an unfortunate but inevitable part of the workplace. People like to talk. And those talks can often turn personal and pump life into the rumor mill. Gossip can bring resentment, expose personal affairs and cause frustration. Here are some signs of a gossiper: 

1. Always whispering 
2. Seems uncomfortable around certain people 
3. Talks about others to you 
4. Two-faced

7. The underperformer - Employees' performance probably fluctuates depending on their strengths and weaknesses, mood and what else is going on at work. But if you have a perpetual underperformer, you have a toxic employee. And you know what else it means? Your other employees have to pick up the slack. Your employees don't want that. Not to mention, your business can't handle that long term. In a nutshell, these are the traits of an underperformer: 

1. Disengaged with their work
2. Fails to meet goals
3. Constantly needs others to pick up the slack  
4. Makes excuses 

Turmoil In Indonesia Life Insurance Industry

Recent defaults by several prominent life insurers in Indonesia are likely to erode customer trust in the industry and dampen the sector's business growth. The incidents also highlight the need for insurers to maintain sound investment-risk management and good corporate governance to restore consumer confidence and survive the turmoil in the economy and capital markets. Fitch does not rate any of the defaulted companies

State-owned life insurer PT Asuransi Jiwasraya (Persero) failed to pay IDR13.2 trillion to customers whose policies matured in 2018-2019. Private insurer PT Asuransi Jiwa Kresna Life failed to make payments of IDR6 trillion on products that offered fixed investment returns of 7.75%-9.75% for 3 to 24 months, above the time deposit rates of 5%-7%.

Jiwasraya's case has spilled over to other insurers, such as privately owned PT Asuransi Jiwa Adisarana Wanaartha (WanaArtha Life), which had its securities accounts blocked by the Attorney General's Office in connection to its investigation into corruption at Jiwasraya.

In addition, Kresna Life exceeded the limit of 25% of total investment assets invested in affiliated entities, which raised its investment risk. The financial sector regulator has ordered Kresna Life to reduce its investments in affiliates, but it may have difficulty doing so while market conditions are weak during the coronavirus pandemic. The regulator has prohibited Kresna Life from adding new business until its order is carried out.

PT ASABRI (Persero), which handled social insurance and pension funds for the national police, military and Ministry of Defense employees, faces significant losses. The Audit Board of the Republic Indonesia (BPK RI) found that ASABRI's net loss of IDR6.21 trillion in 2019 was mainly due to poor performance of its stock and mutual fund investments.

BPK RI also highlighted issues of investment mismanagement at Jiwasraya and ASBRI, with the board saying that the insurers' equity investments were of low quality. The equity investments plunged in value, to the point that the companies had insufficient liquidity to meet obligations. The corruption investigation into Jiwasraya also shows shortcomings in the insurer's corporate governance.

Most insurers also provide savings-plan products, but the promised returns of 3%-7% are lower than those of Jiwasraya and Kresna Life. In addition, these products accounted for a small portion of the insurers' total premiums. In addition, most life insurers allocate their investments to lower risk instruments. This group of nsurers are not expected to face significant disruption to their securities accounts from the Attorney General's investigation into Jiwasraya.

Most insurers may put more emphasis on mitigation of investment risk, transparency, accountability, ethics and integrity following the recent defaults and investigations. The government plans to establish an agency to ensure insurers are able to make payments on maturing policies and minimise policyholders' losses if an insurer defaults.

Wife Murders Husband For Life Insurance Money

A Chiang Mai woman was arrested on Saturday for allegedly hiring a hitman to murder her ex-husband and for alleged involvements in a few other deaths to appropriate their insurance compensation.

On Oct 5, Anan Thongmarn, 58, was slashed on the face and neck and killed. The investigation led to Pankaew KhanKaew, 48, an alleged hitman, and Bualoi Tala, 63, the victim's ex-wife.

Pankaew reportedly confessed that he had committed the murder and his phone records revealed that Bualoi had hired him, as she had personal conflicts with her ex-husband. She allegedly wanted to claim his life insurance worth hundreds of thousands of baht.

She denied ordering the killing, saying she only wanted him to be maimed and claimed the Bt40,000 (S$1,700) she allegedly offered for the murder as only a joke.

Bualoi previously had reportedly received, after naming herself as nominee, insurance benefits from some other deaths. The victims reportedly were poisoned. Police are investigating six possible cases.

Insurance Distribution-mix & Target Market

Insurers that have embarked upon a digital transformation, a revamped model that supports high-volume sales for simpler individual life products is needed, and traditional channels are often no longer the primary method for engaging with customers. Companies that transform must look at the overall sales strategy of both direct vs indirect marketing and selling. They must make investments that can achieve target returns, whether through distribution/brokerage centers, the captive agency market, or independent agents while offering appropriate incentive programs to inspire the workforce (e.g., partial commissions for doing little work around sales and servicing but being available when a customer needs them). 

Companies must align their product and distribution strategies to achieve optimal business transformation. If departments are implementing their own individual objectives without alignment to enterprise transformation goals, this can lead to critical gaps across the value chain for the customer.

Priorities within the distribution 'house' are constantly shifting, and new spaces are always developing. Carriers need to frequently look across the insurance value chain at their priorities, and as they realign there are several issues and opportunities which companies will need to consider:

• Competitive compensation, retaining top producers while incentivizing the right mix of products
• Growth through affiliate channels and other less traditional channels
• Optimizing brand experience across sales channels
• Empowerment for exclusive/captive agents: developing a wide range of trust and mutual benefit with the customer, utilizing CRM tools and features to build upon customer relationships
• Achieving exclusiveness across the value chain through ease of technology, simplicity, and speed to market, providing the ability for carriers to differentiate themselves within the market, and establish brand uniqueness while delivering quality, reliability, compliance, features, etc. 
• Implementing mechanisms for prospect management
• Lines of communication: engagement between front and back office (within the distribution 'house') for those channels in which agents need to communicate with underwriting, billing, claims, IT, etc., including defined processes and procedures
• Management of agent's book of business through CRM optimization (or other tools, such as a distribution management platform), along with a focus on front-office capabilities and skills training
• Tiering benefits to reward or support valued agents, to help the company achieve overall market growth and objectives
• Up-sell/cross-sell across the value chain to build the sales pipeline

Successful distribution will require striking the right balance: relying solely on a systems transformation or a digital transformation will not be enough. The physical and virtual worlds must feel seamlessly linked for agents and customers/prospects. 

Insurers must consider how a customer and agent (including those in a call center) will need to engage with the insurance carrier and design their agent and customer journeys accordingly. Employing an omnichannel approach is table stakes, providing customers the right mix of traditional and digital channels and providing agents the right mix of support and self-service.

Who Owns The Customer

One key question that has challenged the industry for decades is that of 'Who owns the customer?' Are agents/brokers competing with carriers for digital customers and self-service? Or can the two happily co-exist (or at least get along)? 

Captive/tied/exclusive agents, these questions should in theory be simple, as the insurer should own the customer with the agent simply serving as an extension of the insurer. However, in reality, few agents are employees anymore, and many 'exclusive' agents are not exactly exclusive. Nevertheless, these agents do typically seek to build the insurer's brand with their core base of customers by utilizing their branded offices, marketing, etc. for their local outreach.

Independent/non-captives/non-exclusive agents have the flexibility to offer various products from various companies with a better compensation model but present a challenge to insurers. They extend a carrier's reach at little upfront cost, but their loyalty tends to be tied to compensation plans, ease of doing business with a particular carrier, and how a carrier's underwriting standards match up to their client base. As a result, this is where much of the friction lies with customer ownership - agents who want to own the customer, versus carriers looking to grow their wallet share with those customers.

Malaysia Insurers Infringing Competition Act

General Insurance Association of Malaysia (Piam) plans to appeal against the Malaysia Competition Commission’s (MyCC) decision to penalise the association and its 22 members for infringing the Competition Act 2010.

In a statement today, Piam expressed its profound disappointment over MyCC’s decision on September 14 in relation to an arrangement between Piam and the Federation of Automobile Workshop Owners’ Association of Malaysia (FAWOAM) on the minimum hourly labour rates and spare part prices for six commonly used vehicle models, namely Proton, Perodua, Naza, Nissan, Toyota and Honda.

“After three years, Piam is deeply disappointed that MyCC has released a decision that does not fully take into consideration the voluminous evidence tendered and legal arguments submitted. MyCC’s decision rejects legal and regulatory certainty and is a decision against consumers and the motoring public of Malaysia. Piam will lodge a strong appeal against the decision,” it said.

It said under the direction of Bank Negara Malaysia (BNM) to safeguard the interests of consumers, Piam had agreed with FAWOAM to resolve the prolonged dispute between insurers and repairers over spare parts trade discounts and labour rates.

Besides that, Piam said it had tendered clear and robust evidence to MyCC that the arrangement with FAWOAM benefited consumers in terms of faster turnaround time for repairs, less complaints and growth in the numbers of repairers, thus enhancing the availability of repairers for accident repairs.

It added that an independent economist’s report by RBB Economics United Kingdom, which showed clear and robust tangible evidence of how consumers benefitted from this agreement, was also presented before MyCC on two occasions.

Lifepal - Indonesia InsurTech

Both the insurance and technology industries in Indonesia have lately generated great interest among national and foreign investors. In addition, the technology industry is also revolutionizing the life of millions of people in Indonesia, it is changing consumer behaviors and is driving the development of the entire country. Insurtech is therefore one of the most exciting and promising industries to be exposed to today in the country.

Indonesia remains the fastest growing market for insurance globally. A study by Munich Re Economic Research shows that Indonesia will lead the growth in Health and Life Premium with CAGR of 9.1% from 2019 to 2030. For total premium income in the whole year of 2019, insurance companies operating in Indonesia secured Rp185.3trn (USD12.6bn) for life insurance and Rp80.12trn (USD5.5bn) in total premium income for health insurance.



Furthermore, the insurance industry in Indonesia has benefited from the COVID situation thanks to a higher awareness among consumers about life and health risks. A chart shows the speedy recovery of the Indonesian gross premium income for life insurance in 2020 after the pandemic hit earlier in the year. Moreover, the growth percentage in June brought the insurance premium income in June 2020 into a number exceeding June 2019.



Despite growing at an exciting rate, buying insurance for Indonesian customers is not easy and transparent. Customers often have limited access to options as they need to talk to insurance agents that are not always educated about the insurance policies, not allowed to sell multiple brands, and do not help customers after-sales.

In some cases, traditional agents have created mistrust and are no longer capable of helping more educated and digital consumers. The confusion for all the terminologies and bias recommendations from agents has made finding the perfect insurance policy more of luck than a carefully planned action.

Lifepal aims to solve these problems by being the trusted financial advisor thanks to technical content and policies reviews about insurance and financial planning, the possibility to find and compare from the largest selection of policies in the country and receive convenient support and assistance pre and post-purchase such as easy claim, policy management and emergency support.

Lifepal has gained the trust of over 4 million monthly visitors, 1 million social media followers and 50 insurance brands with more than a selection of 200 products ranging from health, life, automotive, employee benefits, and other insurance products. These numbers make Lifepal the biggest insurance marketplace, in the country by size of the inventory, online visitors and registered users.

Lifepal technology is directed to use data of Lifepal’s millions of visitors and understand their needs well before matching them with the most relevant insurance policy for their needs, wants, and budget.

Aligned with the Indonesian government’s target to increase financial literacy, Lifepal routinely publishes data-based articles and social media posts, making clear topics within personal finance, financial planning, investments, business, stocks, and insurance.

The varying backgrounds in the team help them extract and articulate data in a manner that is relatable and easily understandable by the public. Lifepal hopes to help more Indonesians to have a true understanding of their own financial planning and protection.

Policy Loan - Friend Or Foe

One of the reasons some people buy cash value life insurance is the potential to borrow money from the policy later on. When you bought your insurance policy, the insurance agent may have touted that you would be borrowing your own money and paying yourself back.

Insurance agents and companies may promote loans as an easy way to receive tax-free money from your life insurance policy. However, policy loans are more complicated than they appear.

Policy loans need to be reviewed and monitored. If a policy loan is not monitored, a policy could slowly deteriorate, losing the minimum cash value needed. This can leave you with the unpleasant choice of making substantial loan repayments or having a large phantom income tax gain.

What is a Life Insurance Policy Loan - Policy loans are available on most permanent cash value life insurance policies. Policy loans are not the same as other loans: Policy owners are not required to repay the loan. Keep in mind, the insurance company will charge interest on the policy loan.

When you borrow money from your life insurance policy, you are borrowing your own money. It is essentially an advance of money that could be received from the policy either through a surrender of the policy or the payment of the death benefit. It is money that you, or your beneficiary, would have received anyway. The policy’s cash value acts as collateral for the policy loan.

If you never pay back the policy loan during your lifetime, the amount is deducted from the death benefit when you pass away—meaning that your beneficiaries repay the loan.

How Does a Life Insurance Policy Loan Work - Life insurance policy loans are available on life insurance policies where there is sufficient cash value to borrow against. The available loan will be a percentage of the cash value. You must pay interest on the policy loan.

To initiate a policy loan, you’ll need to contact your life insurance company. Before taking out a policy loan, find out what will happen to the components of your policy after the loan. You can do this by requesting an in-force illustration that will reflect the policy loan based on your plans—whether you’ll borrow more money, repay the loan or maintain the loan.

Be sure the in-force illustration also reflects whether you will be paying interest on the loan out-of-pocket or if you will be borrowing interest as well.

And review the following terms of the loan - The insurance company will charge interest in advance or in arrears:

A: Interest in advance

The insurance company charges interest for the full year. This assumes that the loan is continued for that policy year. If the loan is taken out in the middle of a policy year, interest is charged for the remainder of the policy year at the time the loan is taken out. If a loan repayment is made during the policy year, the insurance company will typically not provide any credit or refund on the interest paid in advance.

B: Interest in arrears

The insurance company charges interest at the end of the policy year. Interest accumulates daily. If a loan is taken out in the middle of a policy year, interest starts to accumulate that day. If you make a loan repayment in the middle of the policy year, this would decrease the daily loan interest amount, thereby decreasing the loan interest due at the end of the policy year.

The interest rate may be fixed or variable. Fixed interest rates are guaranteed, so you will know in advance what your loan interest will be each year. Variable interest rates can change each year. Variable interest rates will be disclosed on your policy’s annual statement and with premium notices when loan interest is due.

The money you have taken out can still earn gains. The insurance company will pay you interest (or dividends) on the amount borrowed, although this rate is usually lower than the interest rate credited to the remainder of cash value. On certain policies, you will receive the same interest rate.

Whole Life Insurance policies use the term “recognition” to define how much interest is credited to the amount of the cash value that is loaned out. If your life insurance company uses the non-direct recognition method, you will receive the same dividend on your all cash value. If your company uses the direct recognition method, you may receive a lower dividend on the amount of your cash value that constitutes the loan.

Whole life policies may also have an optional automatic premium loan provision. If you don’t pay your premium due, it is automatically deducted from the cash value through a policy loan.

Keep in mind that Interest on a policy loan is generally not tax-deductible.

How to Monitor a Life Insurance Policy Loan - The insurance company will not require you to pay back the loan balance. Nor do they provide any loan repayment schedule. You have the option each year to pay loan interest out-of-pocket or to borrow the interest. If you choose to borrow the interest, the loan balance will compound, which means that the interest due each year will compound.

It’s important to request an in-force policy illustration annually to determine the impact of a policy loan. Your request should include the following scenarios along with any others that reflect your plans:
a: Re-paying the policy loan in-full
b: Paying premiums and interest out-of-pocket
c: Borrowing future premiums and loan interest
d: Showing what happens if your current premium payments stay the same
e: Showing the premium needed to endow the policy at maturity
f: Any other action you’re considering, such as taking a partial withdrawal or changing your dividend option

Why is a Life Insurance Policy Loan Dangerous - The in-force policy illustration will help you determine how long your policy will remain in-force. You will find that the larger the loan, the more impact it will have on your policy.

For example, with an initial policy loan of $50,000 and a loan interest rate of 8%, the loan interest in year 1 will be $4,000. If you borrow the loan interest, your loan balance would increase to $54,000 (initial loan amount of $50,000 plus the loan interest of $4,000). The loan interest in year 2 would increase to $4,320. The loan balance would increase to $58,320, if the loan interest is borrowed again ($54,000 loan balance plus the loan interest of $4,320). As you can see, this rapidly increases the policy loan balance

Here’s how it works - On a permanent cash value life insurance policy, the cash value increases every year. This reduces the total risk to the insurer because it will pay out only the death benefit when you pass away and absorb the cash value. Mortality costs—the actual cost of insurance for you—are also increasing each year because you get older. But that increase is usually offset for the insurer by the decreasing amount at risk.

If you’ve taken out a loan from the cash value, the lower cash value will result in lower earnings. If your premium payments aren’t enough to cover the mortality cost and other fees, the insurer will take it from your cash value. Now your cash value is being depleted by multiple demands—the loan, lower earnings and fees. And if the cash value goes to zero the policy will terminate, unless you make an infusion of premium.

If the policy terminates, you’ll get dinged by an income tax bill on the loan money you took.
Calculating Taxable Income from a Policy Loan

Here’s how to calculate the potential gain in the policy that would be subject to income tax:
Add the net cash (surrender) value, any dividends received (either prior or accumulated) and the outstanding loan balance.

Subtract the cost basis (sum of premiums paid into the policy).

Example: If a life insurance policy terminates with a loan balance of $100,000 and a cost basis of $50,000, the taxable gain would be $50,000.

Please note that the above example is a general rule and may not apply to every situation. You should consult your tax advisor to confirm whether you have a taxable gain.

Your life insurance company will be able to provide you with the cost basis, along with the gain that they will report to the Internal Revenue. While a policy loan can provide you with immediate funds, it can have a number of drawbacks. Know what you’re getting into before you take the cash.

Korea Non-Life Trimming Staff

Non-life insurers are trimming their workforces in motor insurance sales channels, to cut operating costs amid falling revenue and rising loss ratios. Industry officials said the outlook for the business remains murky, as they cannot control the price of insurance independently despite declining profitability, in the face of the government's tight regulations.

Motor insurance is mandatory and the government controls the premium rates. Insurer cannot raise its auto insurance premiums to the level it wants, which means it has to find other ways to offset rising loss ratios.

Last year, Lotte Non-Life Insurance downsized almost half of its workforce in its auto insurance telemarketing sales channel, in a bid to reduce what it believed to be "inefficient expenses".

"The decision reflects customers' growing preference for online subscription channels," a company official said. "Fewer people rely on telemarketers when they sign or renew their auto insurance."

Other mid-tier life insurers such as Hanwha General Insurance are also slashing their headcount. The Hanwha affiliate accepted voluntary resignations last year, and 30 officials left.

Motor insurance profits keep declining due largely to an increase in car repairs and maintenance costs, with more customers purchasing overseas luxury vehicles.

Indonesia Life Insurance Growth Contracted

The life insurance industry will see a contraction in premium income this year on the back of the COVID-19 crisis, despite people’s rising awareness on health, the Indonesian Life Insurance Association (AAJI) has stated. 

AAJI chairman Budi Tampubolon said on Sept. 25 that the association expected the industry's premium income to contract 2.5 percent year-on-year (yoy). The life insurance industry’s premium income has contracted 2.5 percent yoy to Rp 88.02 trillion (US$5.9 billion) in the first half of the year from the same period last year. The decline in new premium income and renewed premiums contributed to the lower figure.

In comparison, the industry booked Rp 196.69 trillion in premium income last year, up 5.8 percent compared to 2018, according to AAJI data. 

Insurance penetration in Indonesia has been low for a long time. According to the latest data from the Organization for Economic Cooperation and Development (OECD), Indonesia’s insurance spending in 2018 was only 1.79 percent of the country’s GDP, lower than in neighboring Malaysia, where it was 4.4 percent.

In the first half of this year, new premium income dropped 2.7 percent yoy to Rp 54.57 trillion, while renewed premium income fell 2.2 percent yoy to Rp 34.91 trillion, AAJI data show. Despite the slowdown in premium income growth, the group saw improvement in new premium income in the second quarter of 2020 from the previous quarter. 

In the second quarter, new premium income had grown 4.82 percent to Rp 27.18 trillion from the Rp 25.93 trillion booked in the first quarter of the year. 

There is a significant public’s increased awareness in having protection and managing their income during this uncertain time. Since the pandemic, a quarter of Indonesian people are feeling anxious about their health, while 35 percent want health insurance. 

Coupled with relaxations from the Financial Services Authority (OJK), could improve the country’s life insurance industry in the second half of the year. Since the beginning of the COVID-19 outbreak, the OJK has rolled out several relaxations for the insurance industry, including delaying the monthly, quarterly and yearly performance reports, as well as relaxing the solvability rate accounting method, extending the grace period for receivables and allowing investment-linked insurance products to be sold online. Previously, investment-linked insurance products could only be sold in person to ensure consumers were well informed. 

However, as the public is getting used to digital technology during the pandemic, the association is suggesting that the OJK make the policy, which allows online sales of investment-linked insurance products, permanent. However, the association stated that it would still encourage life insurance players to fulfil the requirements to conduct online sales of such products. 

Meanwhile, the association also recorded that 56 life insurers have paid a total of Rp 216.03 billion in COVID-19 claims to 1,642 policies between March and June. Even though the outbreak was declared a pandemic and the treatments are fully paid by the government, life insurers are still paying the claims as a form of empathy and solidarity to our customers. 

As for the claims and benefits outside of COVID-19, the industry had paid a total of Rp 64.22 trillion in the first half of this year. This figure was down 1.9 percent yoy from the same period last year. The claims and benefit payments were dominated by surrender claim payments of Rp 37.87 trillion, 58.7 percent of the total claims, followed by matured claim payments of Rp 7.26 trillion, 11.2 percent of the total claims. 

Despite the payment drop in the first six months of the year, AAJI had estimated that there would be an increase in payment this year. With a compound annual growth rate of 15 percent from 2008 to 2019, we hope we can book higher claims and benefit payments this year to show our commitment to our customers.

Jiwasraya - Fine & Life Imprisonment

Prosecutors have sought sentences ranging from 18 years to life in prison for former executives of state insurer PT Asuransi Jiwasraya for their alleged involvement in graft and money laundering that has resulted in trillions of rupiah in state losses. 

The prosecution demanded a life sentence and Rp 1 billion (US$67,256) fine for former Jiwasraya financial director Hary Prasetyo, 20 years and a Rp 1 billion fine for former president director Hendrisman Rahim, and 18 years and a Rp 1 billion fine for former finance and investment division head Syahmirwan. Prosecutors said that the three defendants were guilty of corruption that caused losses of Rp 16.8 trillion in state funds.

“[The prosecution] demands that the panel of judges officially and firmly convict the defendant, Hary Prasetyo, of several acts of corruption,” public prosecutor Yanuar Utomo.

According to the prosecution, Hary, Hendrisman and Syahmirwan had violated articles 2 and 18 of Law No. 31/1999, as amended by Law No. 20/2001 on corruption eradication, and Article 55 of the Criminal Code. “[The crime] was a deliberate, structured and massive act that led to the financial difficulties befalling Jiwasraya customers,” Yanuar said.

Other defendants in the case are publicly listed property firm PT Hanson International president director Benny Tjokrosaputro, publicly listed mining company PT Trada Alam Minera president commissioner Heru Hidayat and PT Maxima Integra director Joko Hartono Tirto. 

Jiwasraya was first accused of mismanagement when it invested its premium revenue from the JS Saving Plan, one of the company’s insurance products, into so-called pump-and-dump stocks. As a result, it failed to pay out Rp 16 trillion (US$1.1 billion) in matured policies due in February to its policyholders. In June, the Attorney General’s Office named 13 asset management companies and a Financial Services Authority official suspects in the Jiwasraya case.