Indonesia Bad Loan Swells Over US$100 Million

A June 2023 Report from Otorista Jasa Keuangan (OJK), Indonesia’s financial services authority, revealed that the country’s online lenders have collectively accumulated 1.73 trillion rupiah (US$112.7 million) in non-performing loans as of that month. These refer to loans that are overdue for more than 90 days.

The amount marked a 54.9% jump year on year. It also outpaced the growth of total outstanding loans disbursed by the country’s fintech lending platforms, which increased 18.9% year on year.

An additional 3.45 trillion rupiah (US$224.8 million) of loans are 30 to 90 days overdue. 
Together, the bad loans total 5.18 trillion rupiah (US$337.5 million). They also make up 9.8% of the 52.7 trillion rupiah (US$3.4 billion) in total outstanding loans.

Individual borrowers contribute 77.8% to the total non-performing loans, with corporate borrowers making up the rest. The 19-to-34 age group is the most problematic, with 2.68 trillion rupiah (US$174.7 million) in bad loans or approximately 52% of the total. Borrowers aged 35 to 54 years follow suit, with overdue payments reaching 1.71 trillion rupiah (US$111.5 million) or 33% of the total problematic loans.

The aggregate ratio of delinquency over 90 days for fintech lending platforms stood at 3.29% as of June 2023 – an increase compared to the same period last year. In June 2022, the aggregate TWP90 for such platforms was 2.35%.

Currently, there are 102 online lenders that are registered and authorized under OJK.

That said, Indonesia’s fintech lending providers began recording net profits in January 2023. As of June, the lenders have collectively achieved 450.7 billion rupiah (US$29.4 million) in net profits.

Indonesia Regulating Fintech Interest rate

Indonesia will in stages lower the maximum interest rates charged by financial technology (fintech) firms in the microfinance sector, amid complaints that overly high rates have been hurting borrowers, the country's financial regulator said.

Starting next year, fintech firms can only charge a maximum of 0.3% interest per day for a loan intended for consumption which will fall to 0.1% in 2026, the country's Financial Services Authority (OJK) said. Currently the maximum is 0.4% interest per day.

If the interest rates is not properly regulated, then the ones who suffer most are the consumers. Fintech lending has soared in Indonesia especially after the coronavirus pandemic, but it has been tainted by many illegal firms in the market and reports of borrowers unable to pay their loans.

The rates will be much lower if loans are for productive purposes. They will be capped at 0.1% per day starting January 2024 and less than that in 2026 as the government wants to shift the majority of loans from consumption to business activities, especially for micro, small and medium enterprises.

The authority wants 50% to 70% of loans provided by fintech firms channelled to productive activities by 2028, compared to below 40%. The regulation on interest rates is part of the authority's plan to develop the fintech sector from 2023-2028.

Japan Insurer Anti-competitive Activity

Japan ordered four major non-life insurance companies to improve business practices in connection with anti-competitive activity that aimed to keep premiums high. The order was issued to Aioi Nissay Dowa Insurance, Sompo Japan Insurance, Tokio Marine & Nichido and Mitsui Sumitomo Insurance.

The four had been asked to report to the regulator on whether they engaged in prior consultations with each other when preparing contracts for clients. The four insurers said they take the government order seriously and will work to restore trust.

The four insurers engaged widely in activities that were incompatible with the spirit of Japan’s antitrust law.

Embracing Change With Simple Steps

By accepting and embracing uncertainty, leaders can gain clarity, increase innovation and ensure sustainable growth for their firms. Navigating uncertainty has become one of the top leadership skills in today's management.

These three strategies can help you turn unprecedented times into unprecedented actions.

1. Rethink Change - To stand up to uncertainty, you must start reframing it as an opportunity. Rapidly multiplying unknowns increases the pressure to rebuild and reimagine their businesses. Though the journey from uncertainty to clarity is formidable, addressing challenges with a lens of opportunity leads to more and better innovation.

When facing uncertainty, focus on the opportunities and ask yourself and your teams: What's your path to highest impact? In other words, what's the one thing you can do that would have the greatest impact on whoever you serve? That simple question will kickstart clarity and focus.

2. Make It Simple - A focus on simplicity can help. Simplicity is about focusing on the right things rather than doing things right. It's about focusing on the fundamentals, such as customer needs, and simple but powerful questions, such as "what do they need?" that help you get to the core of a problem and ensure you're solving the right one. "Keep it simple" means focusing on the strongest growth opportunities and having the courage to get rid of efforts that don't move the needle.

What are your top five priorities? Are they closely connected to your core strategy? If not, start again. Once you land on your top five, communicate them to your team frequently — and more often than you think you need to (e.g. at every all-hands, at team meetings, 1:1 sessions and more). This crystal clarity will reduce overwhelm for your team and allow them to pour their talents and energy into higher-impact work.

3. Keep It Gritty - Activating creativity and ingenuity and relying on existing resources rather than waiting for additional resources to get started. It's natural to feel overwhelmed during times of constant change and, in turn, gravitate to our comfort zones. But uncertainty is here to stay, and when you practice reframing it as an opportunity and find success through the application of the strategies above, you'll feel confident about how to navigate what's next — in business and beyond.

Sumitomo Acquired Singlife

In one of the largest insurance deals in the region, Japanese insurer Sumitomo Life Insurance is offering to fully acquire local insurer Singapore Life Holdings (Singlife), valuing it at $4.6 billion. Under the deal, Sumitomo Life will buy asset manager TPG’s 35 per cent stake in Singlife for $1.6 billion. It will also offer to acquire the shares of minority investors.

The move would mean Singlife becomes a wholly owned subsidiary of Osaka-based Sumitomo Life. It is part of the Japanese insurer’s strategy in South-east Asia.

Singlife said the transactions are expected to be completed in the first quarter of 2024 and are subject to regulatory approvals in Japan and Singapore. Sumitomo Life, which had first invested in Singlife in 2019, sees Singapore as a key part of its South-east Asia strategy and expects the deal to strengthen the earnings of its international business portfolio.

The home-grown insurer added that Sumitomo Life is fully supportive of its plans and its longer-term aspirations to grow in both Singapore and the broader region. The firm has grown from a small insurtech start-up to become a key player in Singapore’s insurance and financial services industry.

Singlife, founded in 2014, is one of the top six insurers in Singapore based on total assets of $14.4 billion as at Dec 31, 2022. The deal comes after the Japanese insurer in November increased its stake in Singlife to 27 per cent from 23.2 per cent by buying $180 million of new shares.

In September, Sumitomo Life agreed to nuy the 25.9% stake in Singlife held by British-based Aviva for $900 million. Singlife partnered TPG and Sumitomo to buy a majority stake in Aviva’s Singapore business in 2020 for about $2.7 billion. The acquisition of Aviva made Singlife the sole insurance provider for Singapore’s Ministry of Defence, Ministry of Home Affairs and Public Officers Group Insurance Scheme.

Korea Credit Loans Rising Delinquency Rate

With interest rates remaining high, the financial soundness of three internet-only banks ― K bank, KakaoBank and Toss Bank ― has begun to deteriorate, as their delinquency rates continue to soar to highs. The fact that the banks provide a larger proportion of their credit loans to medium- and low-credit borrowers is even more concerning.

Rising Average Delinquency rate - The average delinquency rate for credit loans at the three banks stood at 1.2 percent. Delinquency rate refers to the percentage of loans within a bank's entire loan portfolio of which payments are delinquent.

The three mobile-based lenders' credit loan delinquency rates have been rising sharply since June of last year. Prior to then, the figure was maintained at roughly 0.3 percent during 2021. But it rose to 0.42 percent in late June 2022, and spiked up to 1.04 percent in June this year. The figure rose further to 1.2 percent at the end of August.

The figure is an all-time high for the three internet-only banks, and it has more than doubled in just a year. Considering traditional banks' average delinquency rate on household loans, excluding more stable mortgage loans, was 0.62 percent, as of the end of June, the three mobile banks' credit loan delinquency rates remain at a high level.

Major Banks - By banks, Toss Bank ranked at the top with the highest average delinquency rate of 1.58 percent, followed by K bank at 1.57 percent and KakaoBank at 0.77 percent. Toss Bank explained that the current level of delinquency rate is within its forecast model, adding it has prepared ample reserves as an allowance for bad debts.

Toss Bank also highlighted that it provides the largest proportion of loans to medium- and low-credit borrowers among all local banks in Korea. As of June, medium- and low-credit borrowers account for 38.5 percent of loans provided by Toss Bank, compared to 24 percent at K bank and 27 percent at KakaoBank.

While Toss Bank provides the largest percentage of the loans, K bank's delinquency rate in this specific group of borrowers was the highest at 4.13 percent. An official at K bank explained that the rise of the delinquency rate is partially attributed to last year's surge in credit loan balances, and the bank is closely controlling the figure.

Toss Bank and KakaoBank followed, posting delinquency rates of 3.4 percent and 1.68 percent, respectively, among medium- and low-credit borrowers. Putting them together, the three banks' average delinquency rate in their loans to medium- and low-credit borrowers stood at 2.46 percent at the end of June, 2.9 times higher than a year earlier when it was 0.84 percent.

Toshiba Ends 74 Years History

Toshiba - once a poster boy for Japan's dominance in electronics - known as Japan Inc - the company has delisted, ending a 74-year history with Tokyo's stock exchange. 

The Rots Started - It all started in 2015 when accounting malpractices across multiple divisions came to light, with many of them involving top management. For seven years, Toshiba had overstated its profit by $1.59bn (£1.25bn).

In 2020, Toshiba found further accounting irregularities. There were also allegations related to corporate governance and the way in which shareholder decisions were made.

An investigation in 2021 found that Toshiba had colluded with Japan's trade ministry - which saw Toshiba as a strategic asset - to suppress the interests of foreign investors. At the time, experts said this made foreign investors uncertain about investing in Japanese stocks, making it not just a Toshiba problem, but an issue for Japan's entire stock market.

Westinghouse Electric - In late 2016, Toshiba said it would take charge of several billion dollars related to the construction of a nuclear power plant that US unit Westinghouse Electric had bought a year earlier. Three months later, Westinghouse filed for bankruptcy leaving Toshiba facing a collapse of its nuclear business and more than $6bn in liabilities.

Defensive Management - It sold off a slew of businesses including mobile phones, medical systems and white goods. Then it was forced to put its chip unit Toshiba Memory up for sale - a deal that was delayed for several months over a dispute with one of its partners.

At a time when companies were investing heavily in the future of technology and innovation, Toshiba was having to sell off a prized asset to raise cash. Toshiba managed to secure a $5.4bn cash injection at the end of 2017 from overseas investors, helping it to avoid a forced delisting. But that meant activist shareholders had more say in the direction of the company. 
That lead to protracted battles that paralyzed the maker of batteries, chips and nuclear and defense equipment.

After a great deal of back and forth over whether the company should split up into smaller companies, Toshiba set up a committee to explore whether it could be taken private. In June 2022, Toshiba received eight buyout proposals. Earlier this year, the company confirmed it would be taken over by a group of Japanese investors led by state-backed Japan Investment Corp (JIC) for $14bn.

JIP does have a track record in carving out businesses from big manufacturers including Sony's laptop division and Olympus's camera unit. After acquiring Sony's Vaio laptop business in 2014, it helped the company achieve record sales this last year. But Toshiba is a much bigger company and the stakes are high: Toshiba employs around 106,000 people and some of its operations are seen as critical to national security.

Agent Misappropriated Insurance Premium

Facing financial difficulties, a Prudential insurance agent decided to misappropriate more than S$117,000 (RM546,799) of his client’s money that was meant for insurance premiums to help pay for his home renovation, groceries, car instalment repayments and his daily expenses.

Gng Hoon Hong, 48, was sentenced today to 20 months’ jail after he pleaded guilty to three charges for committing criminal breach of trust. Three other similar charges were taken into consideration during sentencing.

Deputy Public Prosecutor told the court that sometime in 2000, Tung Lei Lei and her husband began buying insurance from Prudential Assurance Company through Gng. Whenever the insurance premium payments were due, Gng would inform Tung who would then transfer the funds to him to make payment to Prudential.

However, starting from 2012, Gng did not transfer all the sums received and had instead misappropriated some of it for his own use. On August 16, 2018, Gng approached Tung to borrow S$10,000 which he purportedly claimed was for an animal shelter.

Policy Lapsed Premium Payment - Suspecting that Gng might be facing financial difficulties, Tung decided to make an enquiry with Prudential and discovered that three of her insurance policies had lapsed owing to no payment made. She confronted Gng a few days later and he showed her a printout from Prudential’s website which indicated that one of the insurance policies was purportedly in force. This printout was, in fact, forged by Gng and amended to reflect that the policy was in force.

The court heard that at the time of the confrontation, Gng did not tell Tung the truth about the lapsed policies and claimed that he was attempting to come up with money to repay her. Tung had also already obtained online access with Prudential for her insurance policies and discovered that her policies had indeed lapsed.

Investigations revealed that, in total, Gng had misappropriated S$117,160.94 over 32 occasions that spanned approximately 6.5 years. After the discovery of Gng’s actions, he made a repayment of S$15,252 to Tung. No further repayment has been made since.

Gng later claimed that he had misappropriated the money due to financial difficulties and used the money to pay for his renovation, groceries, car instalment repayments and his daily expenses.

LIC - Top 4 World Largest Insurer

State-owned Life Insurance Corporation of India (LIC) has become the fourth largest insurer in the world, ahead of US-based MetLife and Prudential Financial Inc. The LIC is only behind Germany's Allianz SE, China's China Life Insurance (CLI), and Japan's Nippon Life Insurance, according to a new ranking by capital market company S&P Global.

The state-run insurer, which got listed in May 2022, has $503.07 billion in reserves, while Allianz has $750.20 billion, CLI has $616.90 billion, and Nippon has $536.80. Allianz SE, CLI, and Nippon Life Insurance Co are the three largest life insurance companies in the world, according to the ranking.

S&P Global recently came out with a list of the world's 50 largest life insurers. In the list, Asia accounts for 17 spots on the list of top global life insurers, making it the region with the second-highest number.

China and Japan share the top spot in Asia with five companies headquartered there. Mumbai-headquartered LIC ranked at the fourth position in the ranking published on November 29.

The Indian insurance behemoth reported Rs 7,925 crore profit in the second quarter of FY 2023-34. While LIC continues to dominate the insurance market, its premium income fell quite significantly in the second quarter, affecting its profit. The company posted a net profit of Rs 15,952 crore in the year-ago period.

The insurer's net premium income dropped 19 per cent to Rs 1.07 lakh crore in Q2FY24 as against Rs 1.32 lakh crore in Q2FY23. However, the first-year premium for the reporting quarter increased to Rs 9,988 crore, as against Rs 9,125 crore in the year-ago period.

LIC said its latest quarterly numbers were not comparable with the year-ago quarter as it had changed its accounting policy in September last year regarding the transfer of the amount (net of tax) of the accretion on the available solvency margin from non-participating policyholder’s account to shareholder’s account.

Top 5 Issues On Claim

Life insurance policies are often crucial for providing financial security to loved ones, but claimants often encounter challenges. Top five issues faced during the claims process:

Policy Disputes: Misunderstandings regarding policy terms can lead to disputes. These may arise from ambiguities in the policy or conflicts between multiple claimants, especially in cases of divorce or recent beneficiary changes. Often, when multiple people make a claim to the same policy, the life insurance company may file an interpleader lawsuit against all claimants.

Claim Delays: Administrative errors or incomplete documentation can significantly delay the processing of claims. Ensuring accurate and complete submission of required forms and documents is essential.

Claim Denials: Insurers may deny claims if they believe the circumstances of the policyholder's death do not align with the policy's terms. For instance, if the death occurs due to an excluded cause, the company may refuse to pay the benefit. They could also deny a claim based on a material misrepresentation if the insured failed to disclose a required item.

Beneficiary Issues: Problems can arise if the designated beneficiaries are not updated or clearly identified, leading to confusion and potential legal disputes. Sometimes there is no beneficiary listed, and the insured's Estate may be entitled to the money.

Lack of Understanding of Policy Types: Many claimants are not fully aware of the differences between term and whole life insurance policies, or accidental policies, which can lead to misconceptions about the benefits they are entitled to.

Bank Mandiri Divested AXA Insurance Indonesia

PT Bank Mandiri Tbk has divested its share ownership in PT AXA Insurance Indonesia. The bank with the golden ribbon logo has released 20% of its shares in the insurance company formerly known as PT M
andiri AXA General Insurance.

The remaining 138,000 shares owned by Bank Mandiri were released to two shareholders, Anil Panjwani and Manoj Ramkrashin Tolani. Each received 69,000 shares or about 10% of the placed and paid-up capital of AXA Insurance Indonesia.

After the share transfer, the company no longer owns shares in AXA Insurance Indonesia. This divestment step is part of Bank Mandiri's strategy to strengthen the conFor information, Bank Mandiri had previously reduced its share ownership in the insurance company. In November 2018, Bank Mandiri had released 40% of its share ownership.

Despite this divestment transaction - it would not end the bancassurance cooperation with AXA Insurance Indonesia. In addition, it also has no impact on cooperation with other AXA Group companies, PT AXA Mandiri Financial Services in the Bank Mandiri Group.

Bharti Group Acquires Bharti AXA Life - India

Bharti Group will acquire French insurer AXA's 49% stake in Bharti AXA Life Insurance Co taking full control of a venture that was jointly run for nearly two decades. It was not immediately clear if the deal marks the French insurer's exit from the South Asian country. 

Bharti said it was in talks with other investors to scale up the business by partnering or combining with their entities. The sector has seen a spate of deals this year as a booming stock market is helping insurers lock in profits from their investments and consolidate their operations in a market dominated by the state-backed Life Insurance Corporation of India.

British United Provident Association (BUPA) is set to become the majority owner of Niva Bupa Health Insurance after it struck a deal to buy a portion of PE firm True North's stake in the JV.

India's billionaire Burman family is also seeking to buy an additional stake of about 26% in Religare Enterprises in a move to capitalize on the country's largely untapped insurance space.

Bharti's JV deal, made through its Bharti Life Ventures arm, is expected to close by December this year, subject to regulatory approvals. The company competes with HDFC Life Insurance, ICICI Prudential Life Insurance, SBI Life Insurance and LIC in a market ranked ninth in the world, according to the insurance regulatory body's latest annual report.

Bharti, which owns India's No. 2 telecom carrier Bharti Airtel, also operates Bharti Realty and runs packaged foods company Del Monte Foods Pvt Ltd in India in partnership with Del Monte Pacific.

Sumitomo Injected S$180 Million - Singlife

Sumitomo Life Insurance Company has injected over S$179.99m to Singlife. The issue comprises 23,684,210 new shares, or a 4.92% increased share capital of Singlife. Following the capital injection, Sumitomo Life now owns 27.001% of Singlife.

Singlife said that it will use the capital to support its business growth.

Ping An Poise To Take Over Country Garden

People familiar with the said plan claimed that Chinese authorities have asked Ping An Insurance Group to take a controlling stake in embattled Country Garden,  the nation's biggest private property developer.

China's State Council, which is headed by Premier Li Qiang, has instructed the local government of Guangdong province, where both companies are based, to help arrange a rescue of Country Garden by Ping An. A state-engineered rescue of Country Garden by Ping An would be one of the most significant interventions to date by authorities to support the cash-squeezed and highly indebted property sector, which accounts for one-quarter of China's economic activity and has sparked fears of a broader financial crisis.

Authorities are keen that any risks posed by Country Garden's liquidity problems should not spill over to the wider economy. While in China companies can rarely ignore a request from the central government, Ping An has been asked to come up with details of the plan and will have leeway to negotiate terms of any deal.

Talks between authorities and core Ping An leaders began in late August and are still at an early stage. Ping An has been asked to conduct due diligence on Country Garden. Discussions between Ping An and authorities are being led by People's Bank of China (PBOC), which is the central bank, and include Country Garden. The National Financial Regulatory Administration (NFRA) is also involved in the talks.

Authorities want Ping An to take a stake of more than 50%. Country Garden's largest shareholder with a stake of about 52% is Yang Huiyan, chairperson and daughter of a co-founder. If Ping An were to become Country Garden's controlling shareholder, authorities would like it to inject capital in stages to ease the developer's liquidity problems.

Authorities are keen for the Country Garden's liquidity problems to be resolved within Guangdong. Ping An was a natural choice because it is based in Guangdong and has been a major Country Garden shareholder, according to two of the sources.

A state-engineered takeover of one company by another is not without precedent in China. But there has not been one in the property sector since Beijing flagged measures in 2020 to tackle the industry's very high debt levels, triggering a liquidity crunch.

Although many other Chinese property developers, including giant China Evergrande have defaulted on their debt, policy steps have mostly concentrated on lowering mortgage rates and relaxing rules so that it is easier for people to buy homes.

Common Insurance Scams

Below are some common life insurance scams:

Phishing: This fraud begins with a scammer sending an email that appears to be from a real-life insurance company or broker. The email offers a payout, but only if you click a link and enter your personal information into a form. That information is then used to defraud you, and no insurance benefit is ever delivered. While it’s common with life insurance, the technique is also used in other scams, too.

Identity Theft: These scams involve stealing your identity and using it for fraudulent purposes. Such schemes may begin with a phone call asking if someone close to you has recently died, and asking for your Social Security number to "expedite payment" from the deceased person’s life insurance policy. Alternatively, the caller may claim something is wrong with your own life insurance policy, and your personal information is required in order to fix it. They may also say your life insurance premium payments are overdue, and they require your credit card information to process payment.

Fraudulent beneficiary Changes: This scam involves a scammer forging your signature on a policy so they, without your knowledge, can fraudulently make changes to it – such as making them the policy’s beneficiary.

Fraudulent beneficiary Additions: Another variation on beneficiary fraud, this tactic is to try to trick the policyholder, usually an elderly family member who isn't in sound mind, into adding them as a beneficiary.

7 signs that you’re being targeted for a life insurance scam

While there are different types of life insurance fraud, they have common traits to look out for. We cover seven common life insurance fraud red flags below.

1. An exaggerated sense of urgency : Life insurance scams often use a high-pressure sense of urgency to push victims to act before they have time to think about what they are signing. Such demands exploit the urgency of the situation, hoping to catch you off guard at a low point, like when a family member just died and you’re thinking about your loved ones’ financial futures.

Techniques employed can include the use of aggressive language, like claiming the offer being made is time-limited, with its expiry being imminent. By pressing “stress and urgency” buttons, scammers hope to bypass rational thinking and make you fail to recognize the red flags they’re waving.

2. Insisting on immediate payment : Life insurance scammers frequently demand not only an instant decision on their offer but instant payment for it as well.

If you’re being pressed to immediately buy a policy, remember that such purchases are nearly impossible, especially over the phone. To get life insurance, you typically need to complete a life insurance application and sometimes a medical exam; it’s not something you can customarily do in a quick call.

3. Unsolicited offers and cold calls : Beware of unsolicited offers and cold calls when it comes to life insurance. For example, you might receive a call out of the blue promising an unbeatable life insurance deal. The caller may even have some of your personal data and weave that into their pitch, in order to create an illusion of trustworthiness or to get more of your personal information, like passwords or PINs for your financial accounts.

Similarly, scammers may send you texts pretending to be from a life insurance company. Often, a link in the text directs you to a website that asks you to enter your bank or credit card details, open a file or input a password. These scams are usually little more than an attempt to get your personal information and commit identity fraud.

4. Offers that sound too good to be true: If an offer sounds too good to be true, it probably is. Good deals on the best life insurance are certainly out there, but beware of pitches for alluring policies from individuals you do not know and did not contact for assistance.

How do experts define an offer that’s too good to be true? According to the National Association of Insurance Commissioners, if the premiums cited are more than 15% to 20% cheaper than the competition, it's probably a scam.

5. Typos and grammatical errors: Written material in texts or emails can provide telling signs of fraud. Legitimate insurers and other bona fide financial institutions are careful to present their products in a professional manner. Typos or grammatical errors are warning signs of a fraudulent message or website.

6. Absence of detail on policy exclusions and limitations: It's a warning sign if the representative or the documentation is not forthcoming about the details of coverage. Reputable insurance providers are always explicit about what is and isn’t covered, not least because they might be held liable for covering exclusions if they did not clearly disclose them earlier.

7. Fake life insurance companies and agents: Some scammers go as far as to create fake insurance companies, and then offer you a worthless policy written by these fictitious insurers. Even when the company is legit, the agent that reaches you may be a fraudster. Warning signs of this scam are agents who advertise cheap policies on social media, who won't get on the phone with you. Rather, they insist on only using email or messaging apps and don't issue any direct communications or documents associated with the actual insurance company.

Life Insurance - 24,000 Complaints Within 10 Months

More than a dozen life insurance companies settled only 14.09 percent of the 24,605 complaints they received in the first 10 months this year, creating uncertainty about whether policyholders will get back their money, official figures showed.

Of them, 95 percent are related to non-settlement of claims despite policies reaching maturity, said an official of the Insurance Development and Regulatory Authority (Idra). The remaining complaints are linked to management issues, violation of rules in appointing top officials and bad investments, among others.

Policyholders filed the complaints against 14 life insurance companies, which settled 3,467 claims between January and October. The insurers are Sunlife Insurance, Homeland Life Insurance, Progressive Life Insurance, Fareast Islami Life, Prime Islami Life Insurance, Golden Life Insurance, Baira Life Insurance, Padma Islami Life Insurance, Sunflower Life Insurance, Popular Life Insurance, National Life Insurance, Swadesh Islami Life Insurance, and MetLife Bangladesh.

There are 35 life insurance and 46 non-life insurance companies in Bangladesh. On October 12, the Idra directed the chief executive officers of the 14 companies to resolve the complaints by December this year. The piling up of complaints come as several life insurance companies are struggling to settle claims due to a lack of liquidity resulting from bad investments and fund embezzlement.

Of the insurers, the highest number of complaints, at 9,336, was filed against Sunlife. In contrast, the lowest number of claims, just one, was lodged against Trust Islami Life, according to the data of the Idra. Sunlife settled 14 percent of the complaints.

The second-highest number of complaints was filed against Homeland Life Insurance. It settled 15 percent of the 4,093 complaints made.

Progressive Life Insurance, which attracted the third-highest number of complaints, resolved 7 percent of the 3,386 complaints filed.

The fourth-highest number of complaints, at 2,058, were filed against Fareast Islami Life, which settled 2 percent of them.

Prime Islami Life Insurance received 1,325 complaints, the fifth highest. Of them, 12 percent were sorted out between January and October.

China Life Insurance Company - Poor Investment return

China Life Insurance Co, the nation’s largest life insurer, said profit fell 36% in the first nine months of this year as stock-market declines and low bond yields weighed on investment returns.

Net income dropped to 35.5 billion yuan (RM23.18 billion) this year through Sept 30, from 55.5 billion yuan a year earlier, the Beijing-based company said in a statement on Thursday, based on new accounting standards effective this year. That compared with an 8% decline in the first half.

China’s equity-market rout this year and lower interest rates have weighed on insurers’ investment returns at a time when they are starting to adopt new accounting rules that better reflect market prices of assets. While premiums income has been recovering since pandemic curbs ended late last year, growth slowed in the third quarter as the surge in sales of savings products eased.

Igloo Partnered Oppo & Realme Insurance

Insurance technology provider Igloo has partnered with smartphone manufacturers Oppo and realme to provide protection and after-sales services in Southeast Asia. Under the agreement, consumers can now purchase Oppo Care and realme+ Care online as well at selected service centres.

Oppo Care features screen protection plans starting at US$0.074 per day and realme+ Care provides extended warranty, accidental warranty and screen damage protection plans for US$0.0035 per day.

The partnership provides a smoother customer purchase experience. Before, after-sales services were offered online but with the recent collaboration, customers can now purchase the services from Oppo and realme’s official websites and other distribution channels.

The new services were launched in the Philippines with realme and in Singapore with Oppo. The companies plan to launch the services in other markets including Malaysia, Indonesia, Vietnam, and Thailand.

Through its agreement with Igloo, Oppo and realme’s customers can now seamlessly access and purchase official warranties through a dedicated customer portal, automatically synchronizing with the smartphone brands’ databases for updates in real time.

Igloo streamlines the process by simplifying registration through a QR code that directs customers to the portal, making the distribution more efficient and elevating customers’ in-store experience.

The collaboration comes as smartphone penetration rates in the Philippines and Singapore are expected to increase to 90% and 96% respectively by 2030, according to data from GSMA. The surge shows how mobile insurance should be more easily accessible and straightforward as mobile devices are more likely to get damaged than any other electronic device in Southeast Asia.

Rahmah B40 Insurance Malaysia

Insurance technology company Gmat (pronounced “jimat”) Sdn Bhd has launched its “Insurance Rahmah” and two other insurance products.Insurance Rahmah is an affordable insurance product targeted particularly at B40 communities. It provides personal accident coverage of up to RM50,000 due to death or total permanent disability. It also covers dengue illness and death due to dengue.

The premium is only RM50 per year or RM4+ per month. There is a takaful and a non-takaful option.Gmat will work with DHRRA Malaysia to create awareness and promote Insurance Rahmah to unserved and underserved communities, and aims to have one million Malaysians insured within the next 12 months.

Informal survey conducted among urban poor communities revealed that only one out of 10 families have some form of insurance coverage. 

Gmat’s other new products are hiker’s insurance priced from RM3 for a three-day trip and car insurance comparison service offering between 10% and 30% in savings for renewal of car insurance. Digital road tax can also be purchased with zero service charge.

Former Chairman Bank Of China - Arrested

The former chairman of the Bank of China has been arrested over suspicions of bribery and giving illegal loans. Liu Liange, chairman of the state-owned bank from 2019 to 2023, had resigned from his position in March this year. Weeks later, authorities announced Mr Liu was facing corruption charges.

The 62-year-old is one of the most senior bankers to be ensnared in President Xi Jinping's anti-corruption probe into China's $60 trillion (£49 trillion) financial sector. The push to weed out corruption from the country's financial industry appears to be ramping up, with officials in April warning that the crackdown was far from over.

Several high profile financial executives from state-owned banks have already been fined, jailed or under investigation - with former chairman of China Life Insurance Wang Bin sentenced to life in prison without parole for bribery

Mr Liu's arrest comes just about a week after he was expelled from China's ruling Communist Party following accusations of wrongdoing by the country's top anti-graft watchdog China's Central Commission for Discipline Inspection.

The regulator accused Mr Liu of a range of illicit activities which led to significant financial risks.


These include accusations of illegally granting loans, bringing banned publications into the country and using his position in the bank to accept bribes and other perks such as invitations to private clubs and ski resorts.


Mr Liu had been a prominent figure in China's banking and financial sector, and had held senior positions in China's central bank and the Export-Import Bank of China. He was promoted to become chairman of the Bank of China in 2019.

Faking Disability Claim

The Criminal Bureau of Investigation (CBI) in Southern Taiwan has busted a disability insurance fraud group case implicating a couple who also collaborated with an insurance agent.

The married pair, surnamed Kang and Li, aided 11 policyholders in faking serious medical conditions like strokes to file false insurance claims. Over a two-year period, this group amassed NT$7.59 million (US$236,000) from insurance premiums. The couple took a 20% share from each claim.

All 13 individuals involved were interrogated. When police visited the homes of those possessing disability certificates, their condition appeared normal, allowing them to move freely without assistance. Following the interrogations, Kang and Li, along with the other individuals, confessed to the insurance fraud. All 13 individuals were then handed over to the Tainan district prosecutor's office for further investigation and face charges of fraud.

Fraud investigation timeline - During the investigation, it was disclosed that the couple also had prior convictions for fraud. They were acquainted with an insurance agent named Xu, who would reach out to the policyholders and promote disability insurance.

The couple would then wait for six months to a year before instructing the policyholders to mimic symptoms of a suspected stroke, such as one-sided limb weakness and numbness, after which they would seek medical attention.

To ensure the deception remained undetected during medical examinations, Kang reportedly instructed the policyholders to feign symptoms of physical paralysis, speech impairment, and dementia. They were coached to inform doctors that a stroke would impair their ability to earn a living.

After receiving medical diagnoses of strokes, the policyholders claimed disability insurance payouts. Starting in 2020 until their exposure in August, at least 11 individuals feigned illness and applied for compensation.

Home Visit Inspection - During home inspections by assessors, Li demonstrated how to pretend to be paralysed in a chair and even aided claimants in changing their diapers. Subsequently, the realization that all the policyholders were assisted by the same agent, lived in Tainan, and travelled to Kaohsiung for medical consultations raised suspicions of an organized insurance fraud scheme. This led to the CBI filing a case.

Police evidence indicated that, despite having medical reports suggesting paralysis due to strokes, the policyholders were physically active, engaging in activities like running and kung fu. Their social media accounts also showcased pictures of them driving go-karts.

SOCSO Ceiling Increased To RM6,000

The increase in insured monthly salary ceiling from RM5,000 to RM6,000 will come into effect after the amendments to Employees Social Security Act 1969 (Act 4) and the Employment Insurance System (EIS) Act 2017 (Act 800).

The increase will benefit workers and their dependents if employees suffer a workplace accident, illness, disability, death or job loss. Prime Minister Datuk Seri Anwar Ibrahim, when tabling the Malaysia Madani Budget 2024 in the Dewan Rakyat, said the increase would raise the cash benefits at a rate of 20.2 per cent for the benefit of 1.45 million workers and their dependents.

The government allocated more than RM200 million to the Ministry of Human Resources (KSM) through the Social Security Organisation (Socso) in the Budget 2024 to strengthen the social protection network and drive the labour market, in line with the federal government’s structural reform agenda.

In the meantime, he said the policy of one per cent employment opportunity for the disabled, which will be extended to ex-convicts and the elderly, will be implemented in various ministries, government-linked investment companies (GLIC) and government-linked companies (GLC) as well as the government’s strategic partners.

Shared Farming Investment

The Companies Commission of Malaysia (SSM) has issued four compound notices for RM1 million to East West Horizon Plantation Bhd (EWHPB), its two directors and a manager for breaching Section 46(1) of the Interest Schemes Act 2016.

SSM said EWHPB and another company, known as East West One Consortium Bhd (EWOCB), both offered interest schemes in the form of shared farming investments related to palm oil cultivation and managed by East West One Group (EWOG).

An interest scheme is a way of doing business and involves the pooling of financial contributions from the public in exchange for an interest in a particular scheme. They were investigated by the commission following complaints lodged against them.

The investigation was carried out following 46 complaints and reports received by the agency involving the two companies from April to September last year. On Sept 25, SSM opened an investigation paper and carried out a physical inspection at the management offices of the companies concerned, as well as the palm oil plantation to examine the issues raised.

Grab - Burning Investor Capital

In 2012 - Tan launched Grab Holdings Ltd in 2012 - just a ride-hailing companies and were backed by Masayoshi Son (Japan’s SoftBank Group Corp). Other investors included BlackRock, Fidelity, Morgan Stanley and Temasek, the Singapore state investment firm.

Before it started publicly trading, Grab was valued at US$40 billion, almost as much as American Airlines, Delta Air Lines and United Airlines combined. Tan, only 39 at the time. Even the date of Grab’s listing seemed auspicious. It read the same backward and forward: 12 02 2021. An eight-digit palindrome date will happen only 12 times this century.

Grab Is Down 70% - Tan and his co-founder, Tan Hooi Ling, rang the Nasdaq opening bell remotely from the Shangri-La. A blizzard of confetti showered the room. The Queen song We Are the Champions blasted out. But almost before the confetti hit the floor, Tan’s luck turned. The stock plunged 21% by the close of the trading day. Then it fell more. Even after a recent bounce, Grab is still down almost 70%.

Grab had raised money in a complicated maneuver involving a corporate structure called a special purpose acquisition company, or SPAC. It was, and remains, the biggest SPAC deal in histor

Burn Investor Capital - Devadas Krishnadas, ­director of local consultant Future-Moves Group, says startups need to do more than burn investor capital and tout their growth potential. Singapore’s aspirations for tech-powered growth have been predicated more on promise than performance.

Who Is Tan - Tan grew up in Malaysia and started his business in a storage room 11 years ago. In the country’s capital, Kuala Lumpur, his company, then called MyTeksi, let customers summon a taxi with a smartphone.

Tan comes from a family of entrepreneurs. His grandfather made a fortune in the auto industry, co-founding Tan Chong Motor Holdings Bhd in 1957 to assemble and sell Nissan cars in Malaysia. His father is president of the publicly traded company.

Like many elite Asians, Tan pursued his higher education in the US, studying economics and public policy at the University of Chicago before getting his MBA from Harvard University.

Two years after starting his company, Tan met in Tokyo with Son, the SoftBank founder and chief executive officer. Son had earned renown for his wildly successful bet on Alibaba Group Holding Ltd, China’s Amazon. SoftBank committed US$250 million to Tan’s business. In 2014 the company moved to Singapore and later changed its name to Grab as it prepared to accelerate its expansion across the region. (In 2020 the company opened a second headquarters, in Jakarta.)

On March 26, 2018, Grab bought Uber Technologies Inc’s Southeast Asian business in return for a 27.5% stake in Grab. It was a major victory for Tan as Uber withdrew from the region. Grab integrated Uber Eats into an existing meal-­delivery business and branded it as GrabFood later that year.

SoftBank - would invest about US$3 billion in Grab. Tan started to refer to his company as Southeast Asia’s leading “everyday super-app,” handling transportation, deliveries and financial services. With encouragement from the company’s ubiquitous advertising, Grab customers got used to highly discounted rides.

Public Traded - By 2020 investors saw Grab as a promising candidate to go public. Tan eventually settled on an exit strategy: the SPAC. In a complex arrangement, a sponsor—in Grab’s case, US-based Altimeter Capital Management—sets up a shell corporation and seeks to merge it with an actual company that has real operations, namely Grab. If an agreement is reached, they combine, and - the actual company is now publicly traded.

Grab had fewer than 25 million monthly users at the time. Southeast Asia had a smaller middle class and lower per-­capita income (compared to China). Grab had raised US$12 billion in venture financing before the SPAC deal. Grab spent US$480 to win a customer, who’d then spend an average of US$29 a year. It would take Grab more than 16 years to recoup its money.

Dual-Class Share Structure - Tan controls 63% of Grab’s voting rights while holding only about 3% of its common stock. While technology companies often use dual-class share structures, Grab’s arrangement is striking because Tan owns such a small percentage of common shares compared with, say, Mark Zuckerberg, who holds a roughly 13% stake in Facebook parent Meta Platforms Inc. SoftBank remains Grab’s largest shareholder, with a 19% stake. Uber still holds a 14% stake.

To this day, unlike the founders of Uber and WeWork, Tan remains in charge. His co-founder, Hooi Ling, is stepping down from operating roles and as a director at Grab by the end of this year.

US$16 Billion Accumulated Losses - And while many tech stocks have stumbled, some as much or more than Grab, Uber’s shares are down far less. Uber finally reported an operating profit in the second quarter. At the end of last year, Grab had accumulated losses of US$16 billion.

Uber had an easier road back. It can rely on its home market, the largest economy in the world. Singapore, while wealthy, is too small to support fast-growing consumer companies; some of Grab’s other Southeast Asian markets are difficult places to earn a profit quickly. And each market has its own languages, customs and regulations, making it a challenge to grow.

Bounce Back - Grab is trying to bounce back. The company scaled down its super-app strategy, though it still offers payments and other digital banking services, along with rides and deliveries. 

Grab remains a substantial business with about 35 million monthly users. Operating in eight countries and more than 500 cities, it posted revenue of US$1.4 billion last year, and its market value is more than US$13 billion. It’s a household name in the region; its logo—“Grab,” often written with two green lines that curve like a roadway—is a familiar sight from Bangkok to Borneo.

One day in August, Grab’s stock jumped 11% after it posted a narrower quarterly loss. Grab points to strong revenue growth and six consecutive quarters of improvement in its favoured measure of profit, which excludes interest payments, taxes and certain noncash items.

Ransomware Attack Philippine Health Insurance Corporation

A recent ransomware attack on the Philippine Health Insurance Corporation (PhilHealth) occurred while the organization's antivirus software subscription had expired. PhilHealth was attacked around September 22 and shut down many of its systems to battle an infection for which the Medusa ransomware gang claimed responsibility.

The incident saw a huge leak of personal information. PhilHealth was also slow to restore service, delaying medical matters for many. Filipinos are justifiably outraged that their national health insurer was attacked and disrupted.

But they can express stronger emotions still – because on Monday local media outlet reported the attack took place while PhilHealth was not running antivirus software. The insurer's license had apparently lapsed several months before, but government procurement regulations made it impossible to renew.

It's not unusual for government agencies in developing nations to use unlicensed software, when commercial licenses are often priced beyond their means. In 2021, for example, An outage at Pakistan's Federal Board of Revenue that it swore could not have been caused by unpaid licenses because it caught up on its bills. Your correspondent also once spoke to a major vendor of design software that had 500 people show up to a conference in India – a nation in which it had sold no licenses and in which users felt they could pirate with impunity.

Whatever the reason for PhilHealth's security fail, its repercussions are serious: personal information has reached the dark web. The insurer release warning customers to ignore unexpected calls, messages, and emails asking for passwords and other information. The insurer also "appealed to refrain from further circulating leaked data as it has dire consequences under the law," including up to 20 years in jail.

As if that will scare ransomware and phishing scum. PhilHealth is presently using antivirus software – reportedly a trial license that expires in 30 days.

Indonesia - Aims Per Capita Income US$10,000 - 2030

Indonesia revealed the government's plan to increase per capita income above US$10,000 by 2030. This is in line with the government's vision of Golden Indonesia 2045. The government wants Indonesia to become an advanced nation by 2045. Thus, by 2030 the government aims the nation to become a middle-income, escaping the middle-income trap.

Indonesia's estimated economic growth could be in the range of 5-5.5 percent. Thus, the per capita income in 2024 could reach US$5,500. Today, Indonesia [per capita income] is US$4,700. 

To achieve a per capita income of US$10,000 or around Rp150 million per year, he said, the minimum income would be Rp10 million per month. Therefore, we must look for which industrial sectors are capable of paying their workers Rp10 million per month. 

Textiles and footwear must be diverted to products that have higher value. Indonesia need to move away from industries that can also be done by other countries such as Bangladesh and others. This is the target for the banking industry.

Malaysia Retirement Poor Security

Employee Provident Fund (EPF) was established in 1951 to ensuring financial security and retirement benefits for its citizens. Millions of Malaysians contributes a portion of their salaries to the EPF throughout their working lives. Over the past 14 years, the EPF has consistently delivered an impressive average dividend of 6%, significantly surpassing the returns of many managed funds and unit trusts in Malaysia. 

Recent statistics from the Employees Provident Fund (EPF) have cast a shadow over the retirement prospects of its citizens. These alarming figures shed light on a harsh reality: Most EPF members will find themselves with insufficient savings in their retirement accounts. As of the close of 2022, a staggering 51.5% of EPF members had amassed savings below the RM10,000 mark. Even more concerning, a mere 18% of EPF members are expected to reach the RM240,000 milestone by the time they hit the retirement age of 55.  

The RM240,000 benchmark has long been considered the basic savings target to furnish retirees with a modest average monthly income of RM1,000 for 20 years, and many experts now argue that this figure needs to be revised in light of the relentless rise in the cost of living. According to recent report - senior couples residing in the bustling Klang Valley area now require at least RM3,210 per month to cover their necessities. This figure escalates to RM2,520 per month for single retirees, with the bulk of expenses attributed to fundamental needs such as food and housing. These stark numbers underscore the pressing need for Malaysians to reevaluate their retirement strategies and address the growing gap between their EPF savings and the actual cost of living in their golden years. 

Low wages: The prevalence of low wages is undeniably a central catalyst behind the burgeoning retirement crisis in Malaysia. Data from the Department of Statistics Malaysia reveals a stark reality: a concerning 82% of employees in the formal sector earn less than RM5,000 per month. This challenge individuals’ ability to meet their day-to-day expenses and severely hinder their capacity to make substantial mandatory contributions toward their EPF retirement accounts. As a result, accumulating substantial retirement savings becomes an uphill battle. In stark reality, these economic circumstances constrain many Malaysians and face the daunting prospect of inadequate financial security in their golden years.

Early EPF withdrawals: During the challenging times of the COVID-19 pandemic, the Malaysian government took a compassionate step by allowing multiple withdrawals from EPF accounts to alleviate the financial hardships faced by citizens. This move provided immediate relief to those in dire need, enabling them to weather the storm. While these withdrawals were a lifeline for many, they came at a cost.

Approximately 8.1 million EPF Members experienced a staggering 50% reduction in their mean savings in 2022 during the height of the pandemic when special withdrawals were permitted.

Withdrawals have affected various races. Around seven million Malay EPF members, who had a median savings of RM16,900 in April 2020, now have an average of only RM5,500 in their EPF accounts. Similarly, other Bumiputera members, numbering approximately 1.4 million, have seen their average savings dwindle to just RM3,300, down from an average of RM10,600..

OJK Monitoring 11 Troubled Insurance Companies

Chief Executive for Supervision of Insurance, Securities, and Pension Funds of the Financial Services Authority (OJK), Ogi Prastomiyono, revealed the development of surveillance of troubled insurance companies.

According to him, the OJK is now conducting special supervision of 11 troubled insurance companies. Special supervision is carried out on companies that are categorized as not normal. Ogi explained that there are three kinds of supervision for non-bank financial services institutions, namely normal supervision, intensive supervision, and special supervision. Special supervision is carried out for troubled insurance companies.

However, Ogi refused to reveal the names of the troubled insurance companies. He only gave a clue that out of the 11 companies, there are 9 insurance companies; 6 life insurance companies and three general insurance companies. There is one reinsurance, and one insurance company in liquidation.

The number of problematic insurance companies this year decreased. In 2022, Ogi said, previously stated that there were 13 problem insurance companies. However, the two companies have been running well and are now under normal supervision.

Indonesia Unit-linked Policy Or Scam-linked Policy

The insurance industry is again in turmoil because customers are protesting asking for refunds from insurance company PT Prudential Life Assurance (Prudential Indonesia) on Tuesday (22/8/2023). 

Prudential Insurance Victims - The demonstration was carried out by four people who are members of the Prudential Indonesia Unit Link Insurance Victim Community, AIA, and AXA Mandiri. in front of the Kota Kasablanka Mall a number of mall security officers blocked them from entering and asked them to leave the location.

However, they refused to leave the place. The protesters also shouted and refused to leave. The confrontation between security and the protesters was intense, with security even dragging them out of the location.

Rita, one of those who claimed to be a victim wanted to go to the Prudential office to ask about her and her late husband's insurance policy claim which had not been disbursed. Combined, the value of Rita and her husband's insurance deposits is IDR 50 million. Therefore, Rita felt she had the right to enter the Prudential office to ask about her rights. He had tried to enter Kota Kasablanka twice but was always thrown out.

Prudential Indonesia's Chief Customer & Marketing Officer Karin Zulkarnaen clarified that his party had taken persuasive steps to the group of protesters so that they could carry out dialogue using official channels.

The latest news is that Rita reported this case to the Tebet Police. He has also made a police report regarding the treatment he received, namely a criminal act in accordance with Law Number 1 of 1946 concerning the Criminal Code, Article 351 of the Criminal Code. The legal process is still ongoing to explore how to resolve this case.

Apart from the Prudential insurance problem, it is still unknown where the error came from. However, the reality is that a number of risky insurance cases leading to failure to pay have become commonplace.

It's very unfortunate, what should be meant as protection is actually a disaster. Insurance as a product to transfer risk has been proven to exist, many people have been greatly helped by insurance.

However, the mistake that often occurs is that people don't understand the policy they are taking or buy a product that doesn't match what they need, resulting in the insurance not being able to be claimed. Or worse, it is the insurance company's fault for not having integrity, because there have been several cases that prove the company embezzled customers' policies.

PT Kresna Life Insurance (Kresna Life) - The most recent case of failure to pay was PT Asuransi Jiwa Kresna or Kresna Life. Kresna's case adds to the series of cases of life insurance failure to pay in Indonesia after previously being experienced by customers of PT Asuransi Jiwasraya (Persero).

Kresna Life experienced default on two of its insurance products, namely Kresna Link Investa (K-LITA) and Protecto Investa Kresna (PIK).

"On February 20, Kresna gave a letter to extend the policy unilaterally for 6 months until August. But after that, on May 14, the benefits stopped, so from May 20, the benefits were actually still there [until August]," said one Kresna Life customer.

Due to the Kresna Life inspection, the OJK also issued a Business Activity Restrictions (PKU) sanction to Kresna Life which was deemed to have violated the provisions regarding the implementation of recommendations based on the results of the previous inspection.

Sanctions were determined through OJK letter number S - 342/NB.2/2020 dated 3 August 2020, as conveyed by OJK Deputy Commissioner for Public Relations and Logistics Anto Prabowo in an official statement, Friday (14/8/2020).

"After the imposition of this sanction, Kresna Life Insurance is prohibited from carrying out new coverage closing activities for all business lines for the insurance company from August 3 2020 until the recommendations from the OJK inspection are fulfilled,".

Previously, OJK had carried out an inspection for the 2019 period which was carried out in February 2020. During this inspection, OJK found a number of violations committed by Kresna Life, especially regarding K-LITA products.

Based on these violations, OJK took supervisory actions, including requiring Kresna Life to pay claims submitted by policy holders.Apart from that, the OJK also ordered Kresna Life to prepare a financial restructuring plan which includes steps for the Company's financial restructuring, the commitment of the Controlling Shareholders/Controllers to overcome Kresna Life's problems, as well as a detailed claim payment plan.

In February 2020, to prevent the risk of difficulties in paying claims for maturing policies and protect the interests of policy holders, OJK ordered Kresna Life to discontinue the K-LITA product.

OJK continues to ask the management and controlling shareholders of Kresna Life Insurance to be responsible for their obligations to policyholders because this is an agreement or civil bond between Kresna Life Insurance and policyholders.

PT Asuransi Jiwasraya (Persero) - Jiwasraya first announced that it was in default in October 2018. In that announcement, Jiwasraya was unable to pay off customer policy claims amounting to IDR 802 billion. Then the number of defaults on JS Saving Plan products continues to increase. Jiwasraya's new management also confirmed that it would not be able to pay customers' JS Saving Plan policies worth IDR 12.4 trillion which mature in October-December 2019.

In the Jiwasraya Health Period document, it is stated that the Jiwasraya health period is divided into five periods, namely Period I 2006-2008, Period II 2009-2010, Period III 2011-2012, Period IV 2013-2017, and Period V 2018- Now.

In Period I, it was revealed that the first deficit that occurred as of December 31 2006 was IDR 3.29 trillion.

The company's main issue is a deficit caused by the company's assets being much lower than its liabilities. In 2006, it was discovered that the company's deficit reached IDR 3.29 trillion. 
Jiwasraya's deficit is getting bigger every year. In 2008, the internal deficit was calculated at IDR 5.7 trillion, this is below the figure provided by independent actuaries who estimated the deficit in 2008 to reach IDR 8-10 trillion.

The Jiwasraya case is currently leading to allegations of corruption and is currently being tried.

The Financial Audit Agency (BPK) also released a calculation of state losses (PKN) due to the Jiwasraya mega scandal case. As a result, the amount of PKN calculated by the BPK reached IDR 16.81 trillion. This amount consists of stock investments of IDR 4.65 trillion and state losses due to mutual fund investments of IDR 12.16 trillion. The amount is slightly different from the Attorney General's initial projection of IDR 17 trillion.

PT Asuransi Bumi Asih Jaya - OJK revoked the business license in the insurance sector for PT Asuransi Jiwa Bumi Asih Jaya (BAJ) on 18 October 2013 which was no longer able to comply with provisions related to financial health (Risk Based Capital) and the ratio of investment balance to technical reserves and claims debt.

In its journey after being revoked, Bumi Asih Jaya has not been able to carry out its obligations, so OJK filed a bankruptcy lawsuit with the Central Jakarta Commercial Court.

Bumiputera Life Insurance 1912 - Problems with Bumiputera are more focused on miss management or mistakes in managing the company. In January 2018 the company admitted that it experienced delays in claim payments of 1 - 2 months due to the minimal premiums generated by the company.

At the end of 2018, the company experienced solvency problems of IDR 20.72 trillion, where the recorded assets were only IDR 10.279 trillion but the company's liabilities reached IDR 31.008 trillion.

As of semester I-2019, Bumiputera's RBC ratio was minus 628.4%, while its investment adequacy ratio was only 22.4%, and its liquidity ratio was 52.4%. The new management of AJB Bumiputera is committed and working hard to resolve the 2020 claims arrears of IDR 5.3 trillion from as many as 365,000 policy holders throughout Indonesia.

PT Bakrie Life Insurance - The case of default by an insurance company belonging to the Bakrie Group occurred in the Diamond Investa product which is a unit link type (insurance and investment). This product failed to pay in 2008 because the company was too aggressive in investing in the stock market, at that time shares collapsed due to the global crisis which was triggered by the subprime mortgage case in the United States (US).

The Capital Markets and Financial Institutions Supervisory Agency (Bapepam-LK), which has now changed its name to OJK, stated that Diamond Investa's payment default reached IDR 500 billion. To resolve this problem, an agreement was reached that Bakrie Life would pay off its obligations in installments.

However, the installments made by Bakrie Life are problematic. Not all policy holders had their funds returned until finally in 2016, the OJK revoked Bakrie Life's operational permit.

Including Prudential cases and several cases of problems above, they need to be a lesson for the public to be more careful in choosing insurance products that suit their needs, as well as the importance of understanding healthy insurance management companies to avoid the risk of default.

Astro Closes Go Shop

Astro Malaysia Holdings Bhd (AMH) has decided to cease “Go Shop” effective Oct 11 due to the challenging overall economic landscape and the changes in consumer shopping behaviour. Astro GS Shop Sdn Bhd (AGSS) which operates “Go Shop” is a joint between Astro Retail Ventures Sdn Bhd (a wholly owned subsidiary of AMH) and its Korean partner, GS Retail Co Ltd (GSR).

The joint venture saw the former holding 60% equity interest while the latter held the remaining 40%. As part of the ongoing strategic realignment underway within Astro, including the execution of significant cost-saving measures, both parties have taken the decision to exit the business.

There has been a significant downturn in this mode of shopping since the pandemic and closure will ensure that Astro’s resources are focused on business lines that contribute the biggest difference to the overall operations. Go Shop is not considered a material subsidiary of AMH and is not expected to have material effect on the group’s consolidated earnings per share, net assets per share or gearing for FY24.