Indonesia Raise Minimum Equity - Insurance Company

Indonesia has raised the minimum equity for insurance firms to hold to at least 250 billion rupiah (S$21.4 million) by 2026, 67 per cent higher than the previous minimum level, following policy defaults in the past few years.

Under the previous rules, the minimum paid up capital for insurance firms was 150 billion rupiah.
The Financial Services Authority (OJK) will increase the minimum to between 500 billion rupiah and one trillion rupiah by 2028.

Limited capital capacity is one of the main issues that has potential to disrupt the sector’s resiliency and stability in anticipating potential economic crises. A number of insurance firms, including state-owned Asuransi Jiwasraya, an insurer for military officers Asabri and one of the country’s oldest insurers, Bumiputera, got into financial difficulty after a wave of unpaid claims.

The new regulation also called for new investors to put in at least one trillion rupiah to start a new insurance business.

Indonesia Universal Health Scheme

Indonesia president Joko Widodo has affirmed that citizens are exempt from medical bills when visiting hospitals, attributed to the national health insurance program, BPJS Kesehatan, covering 95% of the population, or approximately 267 million people.

Additionally, the Indonesian State Budget is responsible for the fees of 96 million citizens under this scheme. During a meeting with insurance beneficiaries in Blora, Central Java, Widodo remarked on the unique nature of Indonesia's healthcare system, noting the country's size and the provision of free hospital access to its citizens.

The president's visit to Central Java included inspections of regional health facilities. These visits encompassed the Toroh Community Health Center (Puskesmas) in Grobogan and the Salatiga Regional General Hospital.

While touring these health facilities, President Widodo emphasized the need for enhancements in health services and infrastructure. Key areas of focus included reducing patient wait times and improving medical equipment, such as ultrasound machines, at community health centres.

In Blora, the president acknowledged challenges related to space availability in hospitals. Nonetheless, he underscored the importance of maintaining good health among the population. He expressed his hope that the BPJS Kesehatan and the Healthy Indonesia Card would continue to serve the citizens effectively.

Elsewhere in the country, Indonesia has announced an increase in the minimum equity requirement for insurance companies, setting the new treshold at 250 billion rupiah (US$16.06 million) by 2026.

RM1.34 Scam Losses - Malaysia 2023

The national scam response centre (NSRC) said losses totalling RM1.34 billion were recorded from 33,234 cases involving various online scams between Jan 1 and Dec 8 last year (2023).The figures were based on records obtained by the NSRC, through reports from victims via the 997 hotline.

The losses involved six modus operandi, with investment scams recording the most losses at RM437 million, followed by e-commerce (RM383 million), telecommunications (RM334 million), e-finance (RM104 million), love scams (RM41 million) and non-existent loans (RM39 million).

The total amount of RM1.34 billion is a major increase compared with 2022, when the recorded losses were RM804 million. The public is advised to be vigilant and not to easily fall for the various tricks of online crime syndicates, especially in investments which promise high returns.

Sompo Holdings & Bigmotor

Sompo Holdings' Kengo Sakurada is planning to step down as CEO at the end of March, over automobile insurance fraud at used-car dealer Bigmotor. The Financial Services Agency is expected to issue business improvement orders to the holding company and subsidiary Sompo Japan Insurance as soon regarding their responses to wrongdoing by Bigmotor. The FSA ended its on-site inspections of Sompo Holdings and Sompo Japan.

The orders will likely urge the two companies to clarify their management responsibility over the matter. The parent company will consider whether Sakurada, 67, should also quit as its chairman, based on the upcoming FSA actions.

Bigmotor Misconduct - Sompo Japan was the only firm among major nonlife insurers to resume referring its auto insurance customers to Bigmotor even though it was aware of the used car dealer's misconduct. Sompo Japan later notified Sompo Holdings of the resumption.

An independent investigation panel set up by Sompo Holdings has criticized Sompo Japan's decision on resuming introductions of customers to Bigmotor as "lacking customer-oriented thinking." Sompo Holdings did not take any proactive measures and failed to properly instruct the unit to deal with the matter, the panel also said, pointing to flaws in the parent company's supervisory system.

Sakurada joined Yasuda Fire & Marine Insurance, now Sompo Japan, in 1978. He assumed his current positions in April 2022 after serving in posts such as president of NKSJ Holdings, now Sompo Holdings. Sakurada was chairman of the Japan Association of Corporate Executives, or Keizai Doyukai, from April 2019 to April 2023.

Bharti Existing AXA India Life Insurance

The Bharti group which has been looking to exit the insurance business and focus on telecom sector is in advanced talks with SBI Life and others to sell its wholly owned life insurance venture Bharti AXA Life Insurance

Bharati group which has been looking to sell its insurance business is in advanced talks with SBI Life and others. The group is planning to sell its now wholly owned life insurance venture Bharti AXA Life Insurance.

Bharati Group Insurance Business - The group acquired its joint venture partner AXA Group’s 49% stake in the life insurance business in October 2023. This after attempts by Hinduja Group and Abu Dhabi Investment Authority (ADIA) to acquire AXA’s stake in the life insurance venture failed. Bharti and the French insurer had formed two joint ventures in 2006, with the Indian partner holding 74% stake in both Bharti AXA Life Insurance and Bharti AXA General Insurance.

Bharti has been looking to exit the insurance business to focus on Telecom after the acquisition. The group has already sold the general insurance business to ICICI Lombard by way of merger when AXA exited the company.

Bharati AXA has a market share of 2% in terms of premium in the life insurance sector. The equity share capital of the company stood at Rs 3,706 crore as of March 31, 2023.

Roojai Acquires Lifepal

Thai insurtech Roojai Group has completed the acquisition of Lifepal, a prominent online insurance broker based in Indonesia.

Roojai Group’s acquisition is set to leverage the strengths of both companies. Lifepal’s established presence as the largest online insurance distribution channel in Indonesia complements Roojai’s expertise in pricing and underwriting technology, promising an enhancement in customer experience.

Over the past year, Lifepal had been actively seeking a new investor with a comprehensive understanding of the insurance sector. Its collaboration with Roojai Group aligns with these criteria, it was stated, offering a strategic partnership between the two entities.

The joint statement from both companies highlights their plans to broaden their product range and distribution networks, both online and offline. The collaboration aims to deliver a more integrated and customer-focused approach to insurance services.

Lifepal’s customers are expected to benefit from Roojai’s competitive pricing structures and enhanced customer experience, a model that has seen success in Thailand. Concurrently, Lifepal’s insurance partners will gain from Roojai’s proficiency in digitalising insurance processes, including aspects like car inspections, claim support, and strategies for portfolio sustainability.

Despite the acquisition, Lifepal will maintain its operational independence from Roojai Indonesia, continuing to offer its online comparison services for car and health insurance.

Singapore - Financial Industry Disputes Resolution Centre (Fidrec)

Victims who have been duped into buying inappropriate financial products will soon be able to claim more in compensation. The Financial Industry Disputes Resolution Centre (Fidrec) has proposed to raise the claim limit by 50 per cent, from $100,000 now to $150,000, if investors suffer losses from misconduct, negligence or contractual breach by employees of financial institutions.

The move is significant because the higher amount will apply to the losses suffered, not the size of the initial investment. Take a bank customer who is misled into a buying an unsuitable $1 million product. He can have his case adjudicated by Fidrec if he suffers losses of up to $150,000.

If his losses exceed the limit, he can still ask Fidrec to hold a mediation, which does not cap claim amounts, so both sides can try to settle the dispute amicably.

This change and others on Fidrec's wish list are likely to be in force by the third quarter of 2024 and will further strengthen Singapore's standing as a leading global financial hub because such access to speedy justice will come at virtually no cost to investors.

Free Service - Fidrec's mediation service is free for claimants, while those who go for adjudication in such cases have to pay only a small fee of $54.50, including GST.

Such easy recourse for consumers who suffer losses due to misconduct or misrepresentation should be reason enough for financial institutions to tighten their supervisory and regulatory checks to weed out rogue employees.

If not, they will have to spend a lot of money and effort to deal with the deluge of claims that may land at their door as investors become more aware of their rights.

Miselling By Banker - Consider a recent case where Fidrec helped a 75-year-old woman recover her investment losses after she was duped into sinking $100,000 in a risky product.

The woman had wanted to put her money in a fixed deposit account but a bank employee sweet-talked her into investing it instead by lying that she not only would get better returns, but her initial capital would also remain intact.

She learnt she had been fooled only about a year later when she noticed that her $100,000 deposit had plunged by about 20 per cent.

Fidrec's adjudicator found that the woman, who could speak only Mandarin, was misled by the bank employee who stated in her records that the woman was a seasoned investor even though this was not true.

While the Monetary Authority of Singapore requires banks to safeguard the interests of elderly and illiterate customers, the employee's supervisor had failed to ensure that the woman knew what she was getting into. As a result, the bank was ordered to compensate her.

More Compensation - Many people are deterred from filing lawsuits to recover investment losses due to hefty legal bills. Moreover, they also face the risk of footing the costs of the other party if they can't prove their case.

This is why Fidrec is a boon for the average investor. It ensures that deserving claimants can get back their money without having to worry about paying high legal costs. The rising costs of living and income over recent years mean that investments by retail consumers have become larger. Although only a small percentage of claims exceeds the $100,000 limit now, these often pertain to disputes involving scams, insurance claims and market conduct, which are significant issues for retail consumers.

For instance, the number of claims exceeding $100,000 had been creeping up in the last three financial years (FYs), from about 100 cases in the previous two financial cycles to 157 cases in FY22 / 23.

While raising the claim limit will benefit more people, you should never read the change as giving you the right to file a complaint against a financial institution just because you are unhappy with the investment outcome.

After all, investments always carry risks and the most basic step you should take is to understand what you are getting into and that you can lose money if markets turn. This is why Fidrec will not entertain claims from investors who are dissatisfied with the performance of investments they had bought willingly and through no fault of the vendors.

Similarly, complaints relating to standard commercial decisions and pricing policies, such as higher interest rates and fees, will not be entertained.

Small Businesses Eligibility - Like many retail investors, small businesses may not have the resources to take on banks and insurers over disputes involving day-to-day transactions. That Fidrec is proposing to hear claims from small businesses is welcome news for such entrepreneurs.

Fidrec wants to allow small businesses with an annual turnover up to $1 million to use its services. The move is expected to benefit more than 200,000 of such firms, especially when they face the following disputes:

Like safeguards to protect consumers, this business-friendly proposal will be applauded by smaller businesses as it is tantamount to giving them a much-needed David versus Goliath slingshot against bad and unfair practices of the big financial institutions.

In the wake of rising costs, it is truly heartening that public bodies like Fidrec are looking at ways to improve access to justice without any cost burden being imposed on people.

Together with the judiciary and the enforcement branch of the Government, this is why Singapore will continue to be the best and safest place to invest and do business, even for the man in the street.

Indonesia Top Smartphone User

Finance and personal loan apps, as well as those that boost Internet security, are the most downloaded in Indonesia. The popularity of these apps, rather than those for entertainment, social media or messaging platforms, stems from Indonesia’s lack of access to traditional banking services and strict Internet regulations.

App downloads from the finance and personal loan genre in Indonesia amounted to about 222 million in 2023. In second place, at about 194.7 million downloads, was virtual private network (VPN) apps. VPN is a technology that enables a secure network connection over the Internet.

In third place was personalization apps, like software to change a user’s phone wallpaper, at about 190.5 million downloads. Social media and communication apps trailed in seventh place, at 124.4 million downloads, coming after other categories like photo editing and entertainment apps.

Smartphone Penetration For Mobile Phone - The population of Indonesia exceeds 270 million, with more than half of its people aged 40 and under. Nearly 68 per cent of the population in 2022 owned and used a mobile phone.

The number of downloads for personal loan and finance apps in 2023 grew by 22 per cent from 2022. High popularity of personal loan apps in Indonesia is largely due to the country’s high digital and smartphone penetration. These apps, including the popular home-grown moneylending app EasyCash, appeal to a population which lacks access to traditional banking services.

Apps offer convenience (and) quick approvals, especially among small-business owners and individuals needing short-term financing. This, however, also brings challenges to the archipelago, including potential high interest rates, debt risks, privacy concerns, and the need for regulatory oversight and consumer education.

Massive download numbers of such apps are due to app developers’ willingness to spend on effective digital marketing. Advertisements on these services are commonly found online in Indonesia, as well as on billboards. Lending apps like EasyCash are programs that some users download only when they need to use them and delete them thereafter, unlike TikTok or Shopee which they use much more frequently. Therefore, it is not a surprise that the same user might download that app multiple times over the year.

VPN Growth - Compared with finance and personal loan apps, downloads for VPN apps grew even faster by a whopping 59 per cent. VPN apps are popular in Indonesia due to strict Internet regulations and censorship, as they allow users to bypass content restrictions – for example, among video streaming apps – as well as access blocked websites.

Noting that Indonesians have been among the most prolific users of VPNs over the years, apps such as Netflix had been restricted by the authorities in the past, and people used VPNs to access them.

More awareness of digital privacy and security among Indonesian Internet users also drives the usage of VPNs, as they offer a layer of protection against surveillance and data theft.

Top User - Indonesians are the world’s heaviest mobile phone users, with an average usage of 6.05 hours a day. Thailand is second at 5.64 hours, while Singapore is ranked eighth, at 4.51 hours.

Indonesian is just like the millions of Chinese Internet users back in early 2010s, the majority of the Indonesian population today access the Internet first through their mobile phones. As compared to their counterparts in the West who already have access to desktop or laptop computers, it is natural for a lot of Indonesian users to only spend their online time on the mobile (phone).

Financially Prepared For Cancer

Nearly half of Singaporeans (43 per cent) who have never had cancer believed that they are not financially well-prepared to manage the disease if they are diagnosed with it. Almost one in three (32 per cent) also expressed concerns over the cost of cancer care, which may significantly affect their decisions about whether to delay or receive treatment.

Such concerns are not limited to those in lower-income groups but also extend to middle-income respondents. Around 1,200 respondents were surveyed online.Early survey data suggested that a significant share of Singapore resident households may feel under-prepared financially to cope with shocks such as cancer, and more specifically, are unclear of what cancer entails — from disease incidence to treatment costs and healthcare financing.

Leading Cause Of Death - Cancer was the leading cause of death in Singapore in 2022, making up 23.9 per cent of all 26,891 recorded deaths that year. The financial impact of cancer diagnosis can be significant, given the expenses in medical care settings on medications and procedures such as chemotherapy.

Indirect costs also contribute to “financial toxicity”. Such “toxicity” includes income loss experienced by the patient from cancer-related disabilities and by family members providing care.

In oncology practice, financial toxicity is used to describe the detrimental effects of the excess financial strain caused by the diagnosis of cancer on the well-being of patients, their families and society — and it is increasingly recognized to adversely affect a person’s quality of life.
Financial Toxicity may significantly affect their decisions about whether to delay or receive treatment.

Financial Prepared - Around half (47 per cent) of the respondents with no history of cancer felt financially prepared for a cancer diagnosis, with many (30 per cent) saying that they were “moderately” well-prepared for the disease

Conversely, around 42 per cent of the respondents believed that they would be ill-prepared, with 14 per cent of respondents perceiving that they are “not well at all” financially prepared for such a diagnosis

When asked how confident they were that their existing health or critical illness insurance policies, or both, would fully cover the cost of cancer treatment in the future, 43 per cent of the respondents said that they were slightly confident, while 29 per cent said that they had no confidence their insurance would be able to cover the full cost of treatment

Only 33 per cent of the 1,200 respondents were aware of the recent changes to the financing of outpatient cancer treatment based on the Ministry of Health’s Cancer Drug List, which had been announced before the survey

Respondents without critical illness insurance coverage said that unaffordable premiums was a key reason for not buying insurance policies. Respondents with insurance coverage may not be knowledgeable about their own insurance plans, specifically policy benefits, exclusions, co-payments and claim amounts

Respondents who perceived themselves as “highly financial literate” were less likely to anticipate delaying or foregoing cancer treatment due to cost concerns

The biggest challenge for anyone is to retrain their brain to make better choices. The first step is to avoid thinking you must change your entire world. There are three good habits that you can adopt to ensure lasting change.

Start your day unplugged - Many of us used to wake up in the morning with the phone right next to the bed. Our mind was conditioned to grab the phone within seconds of waking up and checking my notifications and emails. This habit disrupted your peace, and you started the day without taking a moment to meditate, pray, reflect, and plan. However, you learned to retrain my brain and clear your head each morning by putting the phone in another room (airplane mode) to avoid temptations. Starting the day peacefully has become crucial, followed by a healthy breakfast and a short outdoor exercise routine, such as taking a brisk walk, to get energized for the day ahead.

Learn from people smarter than you - Entrepreneurs and leaders in influential positions often believe they have all the answers to solve complex problems. However, they cannot do it alone. Yet, many try to do so by relying on their oversized ego without listening to and considering the advice of others. Warren Buffett has always advised that success depends on surrounding yourself with the right people. He suggests that "you will move in the direction of the people that you associate with. So it's important to associate with people that are better than yourself." As the famous saying goes, we become the average of the five people we spend most of our time with. Therefore, it's essential to associate with those who are further along the path and who can help us learn new things, grow, and advance our careers.

Make time to think - Neglecting self-care is one of the biggest mistakes any leader can make. We might spend a lot of time meeting with others and caring for our teams or business, but it's just as important to set aside time for ourselves to think and reflect. Research suggests that blocking off time for yourself gives us the space to focus on deeper thoughts rather than just reacting to immediate issues. If finding time for yourself to think is challenging, try delegating less essential and time-consuming tasks to others.

Insurer Training Manager Remanded For Corruption

The Malaysian Anti-Corruption Commission (MACC) has remanded a former head of department of an insurance company for soliciting and accepting bribes. The bribes were allegedly received by the suspect from a training and consultancy service provider estimated to be approximately RM500,000 in return for recommending the award of contracts to three companies.

According to MACC sources, the female suspect in her 30s was apprehended yesterday at about 7.20pm when she came to the Kuala Lumpur MACC office to have her statement recorded.

Thailand Launched Universal Healthcare

Public Health Minister expressed satisfaction with the new 30-baht plus healthcare scheme in Thailand - which was launched last Sunday in Roi Et province. The program, operating under the One Card for All concept, allows members of the universal healthcare card scheme, also known as the gold card scheme, to access medical services from any hospital in Roi Et, Phrae, Phetchaburi, and Narathiwat provinces during its preliminary stage. 

The ministry has earmarked 300 million baht (US$8,595,990) to back the initiative during this first phase. In the second phase set for March, the project is slated to broaden its reach to the provinces of Phetchabun, Nakhon Sawan, Nong Bua Lam Phu, Amnat Charoen, Nakhon Ratchasima, Sing Buri, Sa Kaeo, and Phang Nga.

Thailand seeks 6.2 billion baht (US$ 177,650,460) to run the 30-baht plus health care scheme in the 2024 Budget Bill this year. This entails collaborating with the Social Security Office to extend this project to members of the Social Security Fund, thereby enabling SSF members to access any hospital using their ID cards in the future.