Unhappy Motorcycle Taxi Drivers

Over 1,000 motorcycle taxi drivers staged a strike in several Indonesian cities on Aug 29 to protest against their low pay, and called on the government to provide them more protection from the practices of ride-sharing companies that are said to be unfair.

Drivers wearing trademark green jackets gathered outside the communications ministry and near the Jakarta offices of Indonesia’s largest technology company GoTo and South-east Asia’s biggest ride-hailing and food delivery firm Grab.

Motorcycle taxis are ubiquitous across Indonesia, including in the capital Jakarta, known for some of the world's worst traffic congestion, and the protests prompted some complaints on social media of slow services.

GoTo & Grab - GoTo and Grab offer ride-hailing, food delivery, and other services in several South-east Asian countries, and have a combined market capitalization of about US$18 billion (S$23 billion).

Drivers want ride-hailing firms to increase the share they get for every trip they complete from 80 per cent now and for the government to give special status for their terms of employment so they have more bargaining power over fees. Driver claimed to work for 10 hours every day but made less than 150,000 rupiah (S$12.60) most days. This means the daily income is below Jakarta’s minimum wage of 5 million rupiah.

The companies recognize drivers as partners, so they do not have the legal obligation to set minimum wages, pay social security insurance or limit working hours. 

Igloo Insurance Agent Digital Tools

With the launch of Ignite in the Philippines, Igloo says it aims to support intermediaries in the country with essential digital tools to enhance productivity and contribute to increasing insurance penetration, which currently stands at just 1.75% of the entire population. 

Over the past year, Ignite has expanded its features from nine to 20 advanced tools, improving usability and productivity for sales intermediaries. In a statement, the insurtech noted that this development has resulted in a satisfaction rate exceeding 95%, with users highlighting the “straightforward registration process”, “good coverage of insurance products”, and “simple quote and application process”.

In addition, a survey by tech-powered impact measurement company 60 Decibels revealed that nearly 60% of 305 sales intermediaries surveyed, reported an increase in income since partnering with Ignite, with 76% learning useful skills and 73% acquiring opportunities to advance in their roles.

In response to user feedback, Ignite now includes a new iLearn feature, providing access to training content in various formats such as pdf documents, infographics, videos, and quizzes, to improve insurance product knowledge and selling skills.

Additionally, Igloo has introduced a new Ignite microsite to assist in recruitment, offering valuable content for those interested in full-time or part-time careers in insurance sales. Ignite is also available as a white-label solution for insurers seeking to digitise their sales activities and processes.

Insurance Digital Makeover

Most traditional industries are undergoing a digital makeover due to the increased usage of smartphones and other instant access to information. The insurance sector, once synonymous with stacks of paperwork and lengthy meetings with agents to get quotes, is no different.

InsurTech - an emerging category in the connected economy, is spearheading this digital transformation, with startups leveraging advanced tools and technologies — from artificial intelligence (AI) to big data analytics — to transform how individuals choose and purchase insurance.

The proportion of consumers shopping online for insurance surged from 22% to 27% between 2022 and 2023, while those turning to agents dropped from 42% to 35% over the same period. This reveals a notable trend among younger consumers, who are turning to online communication channels when assessing life insurance options.

While younger individuals are more likely to have auto and health insurance, over 60% of Gen Z and millennial consumers plan to purchase one or more insurance types within the next 12 months, with nearly half eyeing life insurance specifically.

Streamlining & Convenience - One significant way digital platforms are transforming the life insurance landscape is through the simplification of the purchasing process. Websites and mobile apps offer intuitive interfaces that guide users through the process, eliminating the need for complex forms and confusing terminology.

Moreover, with just a few clicks or taps on their smartphones or computers, consumers can compare quotes from multiple insurance providers, assess different policy options, and make informed decisions about their coverage.

By inputting basic information such as age, health status, and desired coverage amount, users can receive tailored insurance options in seconds, enabling them to make informed choices without the need for extensive research or consultation.

Bridging Insurance Agents - InsurTech firms are also transforming the sector with platforms tailored for life insurance agents, enabling agents and their clients to access near-instant quotes, compare, and apply for life insurance and long-term care insurance across multiple major carriers.

The process with an eApplication software that can be completed in just five minutes, and also provides agents with personalized websites which can be integrated into existing sites as white-label widgets. Prioritizing agents’ convenience underscores the industry’s recognition of the crucial role professional guidance plays in the insurance process. 

In fact, despite their preference for online convenience, Gen Z and millennial consumers continue to place significant value on the guidance and expertise of financial professionals, even as they conduct their research and gather information online.

Specifically, nearly half of each demographic value the expertise provided by financial experts when making their ultimate insurance purchase decisions. This preference is rooted in a widespread lack of confidence among young consumers regarding their understanding of insurance products. 

In conclusion - digital platforms are reshaping the life insurance industry by streamlining the purchasing process for consumers, while simultaneously equipping agents with advanced tools and technologies. This convergence of technological innovation and professional expertise is positioning the sector to better meet the evolving needs of today’s connected consumer.

Starbucks CEO Ousted

Starbucks has announced the departure of its Indian-origin chief executive office (CEO) Laxman Narasimhan, who had been with the company for less than a year. Narasimhan, who took over as the chief executive in March 2023, has been replaced by Brian Niccol, the current chief executive of Chipotle Mexican Grill. The change is ‘effective immediately’, and Narasimhan will also step down from his position on Starbucks’ board of directors.

Who is Starbucks’ former CEO Laxman Narasimhan?
Narasimhan’s nearly 30-year career includes him taking on several prominent roles in global companies. Born on May 15, 1967, in Pune, India, Narasimhan holds degrees in Mechanical Engineering, German, International Studies, and Finance, having studied at institutions including the University of Pune and the University of Pennsylvania.

He spent nearly two decades at McKinsey & Company, where he advised businesses in various sectors, followed by a successful tenure at PepsiCo, where he held several high-profile positions, including global chief commercial officer.

Before joining Starbucks, Narasimhan served as CEO of Reckitt, where he focused on expanding the company’s e-commerce presence and supporting the workforce during the Covid-19 pandemic.

He also gained a reputation for prioritising work-life balance was highlighted in a recent interview, where he mentioned his practice of not working past 6 pm — a stance that resonated with many but may have been out of sync with the demands of leading a global brand like Starbucks.

Why was Laxman Narasimhan ousted as Starbucks CEO?
This sudden leadership change comes as the coffee giant grapples with declining sales and increasing pressure from activist investors. Under Narasimhan’s leadership, Starbucks has struggled to maintain its market position, with the company reporting two consecutive quarters of declining comparable sales. The situation was further exacerbated by a disappointing earnings report in April, which highlighted the impact of weakening consumer sentiment and difficult market conditions in China. This has been a tough year for Starbucks, with its stock price falling by 20 per cent before the announcement of Narasimhan’s exit.

This change also comes at a time when Starbucks is working to finalise contracts with its unionised stores, an area where Narasimhan had been seen as more open to unionisation efforts compared to his predecessor.

Starbuck, among other major US-based companies, including McDonalds, had also faced significant controversy towards the end of 2023 tied to the Israel-Palestine conflict. There were many cries of boycott against the global coffee chain due to Starbucks’ alleged ties to Israel. This opposition to the coffee chain also affected its partnerships, most notably South Korean boy band NCT. NCT reportedly lost millions of followers in the month of May upon announcing its collaboration on merchandise with the firm. The news also led to fresh cries for boycott.

Who will replace Narasimhan as Starbucks CEO?
The decision to bring in Niccol as the new CEO appears to be driven by investor concerns, particularly those voiced by activist funds such as Elliott Investment Management. The fund, which has a stake in Starbucks, had been pushing for changes to boost the company's share price. Niccol, who has been at the helm of Chipotle since 2018, is credited with driving significant growth and increasing the chain’s profitability, making him an attractive choice for a company in need of revitalisation.

Hanwah Life Acquires Nobu Bank

Hanwha Life Insurance has become the first domestic insurance company to venture into overseas banking.

The company announced on April 24 that it will acquire a 40 percent stake in Nobu Bank held by Lippo Group, the sixth largest conglomerate in Indonesia. The process of equity investment will be finalized through contract signing between the two parties and approval from regulatory authorities in both countries. Currently, Lippo Group is the largest shareholder of Nobu Bank, but after the agreement, Hanwha Life will become the largest shareholder.

This marks the first time for a domestic insurance company to venture into overseas banking. Earlier this year, the Financial Services Commission allowed insurance companies to own foreign banks through amendments to the Enforcement Decree of the Insurance Business Act.

Established in 1990, Nobu Bank is a mid-sized bank ranked within the top 30 locally. With total assets of 2.3 trillion won (US$1.67 billion) as of the end of last year, it owns 115 branches across Indonesia. The bank has a workforce of 1,247 employees. Its main products include personal mortgage loans and working capital loans for small and medium-sized enterprises. It reported a net profit of 12 billion won last year.

Indonesia, along with Vietnam, is renowned for its high growth potential in Southeast Asia. With a population of 270 million, Indonesia ranks fourth in the world. In 2022, its gross domestic product (GDP) growth rate reached 5.3 percent, outpacing South Korea’s 2.6 percent and the global average of 3.1 percent.

Hanwha Life’s successful investment in Nobu Bank is largely attributed to the leadership of Kim Dong-won, Chief Global Officer (CGO) and President. Kim, the second son of Hanwha Group Chairman Kim Seung-youn, assumed the role of CGO in February last year and has been spearheading Hanwha Life’s overseas operations ever since.

President Kim has focused on building a network with global leaders by attending the World Economic Forum, also known as the Davos Forum, six times. The contract this time was also initiated by a conversation between Kim and John Riady, CEO of Lippo Group, at the Davos Forum in January this year.

Hanwha Life and Lippo Group have maintained a friendly cooperative relationship. Hanwha Life acquired a 62.6 percent stake in Lippo General Insurance, the 14th largest non-life insurance company in Indonesia, in March last year. Hanwha Investment & Securities, a sub-subsidiary of Hanwha Life, is also awaiting regulatory approval after signing an acquisition agreement with Lippo Group affiliate Ciptadana Securities and Ciptadana Asset Management in June last year. With these developments, Hanwha Group has completed its portfolio of a comprehensive financial company in Indonesia, covering life insurance, non-life insurance, banking, and securities.

Hanwha Life plans to use Indonesia as a base to pursue its expansion strategy in Southeast Asia. In the future, it aims to maximize synergy by utilizing Nobu Bank’s bancassurance channels to sell products from Hanwha Life Indonesia and Lippo General Insurance.

Hanwha Life’s first overseas subsidiary, Hanwha Life Vietnam, became the first domestic insurance company this year to receive cash dividends of approximately 54 billion won from its overseas local subsidiary.

Asuransi Jiwasraya Disbanded

The Indonesian government will disband troubled state insurer PT Asuransi Jiwasraya in September after clinching a deal with policyholders. The country’s oldest insurer reached a deal with 99.7% of policyholders to transfer their policies to insurance holding firm PT Asuransi Jiwa IFG.

The transfered policies were valued at 38 trillion rupiah ($3.2 billion), local news outlet Antara reported, citing a Financial Services Authority official. Jiwasraya was founded as a Dutch-owned entity in 1859 and was nationalized by the Indonesian government in 1960.

A 2016 audit revealed violations of investment guidelines that eventually led to a negative equity of more than 28 trillion rupiah, prompting the government to begin work to rescue the company. Its near collapse hurt more than 7 million clients across the country.

Nestle CEO Sudden Departure

CEO Mark Schneider was ousted in a sudden decision by the world's biggest foodmaker as a result of the group's underperformance. Nestle announced Schneider's departure late on Thursday following a board meeting and appointed company veteran Laurent Freixe as its new CEO. This put an end to a near eight-year tenure by Schneider, a 58-year-old German, the first company outsider to lead Nestle in nearly a century.

Nestle shares hit a record high in January 2022 as the group enjoyed a pandemic-driven boom, but they have been on a downward slide since May 2023 after a series of mishaps, earnings misses and guidance downgrades. There were also worries about slowing product development, with new and revamped products taking longer to be devised and rolled out, with the accompanying marketing campaigns. The virtuous circle of introducing products, which generated cash for new products, was slowing down. That was a real concern.

Nestle's price-to-earnings ratio, used to gauge the relative value of a company's stock, is 17.7, down from more than 25 in June 2022. That is higher than the consumer goods industry average of 10, but below rival Unilever's 18.5.

Analysts said uncertainty about whether Nestle could reach its 2024 and 2025 targets and concerns the new CEO may reduce profit guidance as he focuses more on sales growth than margins, were among the factors weighing on the stock. So far in 2024, Nestle's shares have lost 10.3% of their value, trailing Danone's 3.9% gain and lagging Unilever's 29% increase.

Industry analysts have said Nestle has been too reliant on price increases, which have hit sales volumes as cash-strapped customers turned to cheaper brands.