Indonesia: Takaful association upbeat about prospects for this year
Source: Middle East Insurance Review | Sep 2023
The Indonesian Islamic insurance industry is expected to continue to grow positively this year, according to Indonesian Shariah Insurance Association (AASI) chairman Rudi Kamdani.
Mr Kamdani was speaking at a forum on the topic, ‘Second Half Year Economic Outlook 2023: Strengthening and Development of the Non-Bank Financial Sector’ which was organised by Infobank and Asianpost last month.
He said that the optimism was due to the recent Financial Services Authority Regulation (POJK) Number 11 of 2023 concerning the separation of shariah units of insurance companies and reinsurance companies.
He said that POJK 11 of 2023 stated that Islamic financial institutions are required to prioritise Islamic financial products. Assets that are financed under shariah principles have to be insured by takaful. All government projects that are financed in accordance with shariah rules are also required to use Islamic insurance products.
In addition, the use of electronic or digital facilities in the Islamic financing system is expected to speed up existing processes, he said.
Mr Kamdani asked for clarification of existing regulations at lower levels, so that Islamic financial institutions could actually implement what is mandated by the regulator.
He said, “There are still challenges, especially regarding spin-offs and the use of technology such as AI, because the investment in this technology is not small. However, if all the provisions are clearer, the challenges can be minimised.” M