Asuransi Wahana Tata experienced 15% annual growth since 2012, with the exception of 2014 being a challenging election year in which our realization was around 5%. As for 2015, we are quite optimistic about the new government’s policies, especially as the new administration intends to spend extensively on infrastructure projects such as ports, toll roads, airports and power plants. Should these plans go through and the government manages to keep its focus with regards to the master plan, the outcome would help support the expansion of the country’s insurance sector. Indeed, such plans would need insurance protection from companies like Wahana Tata for risk-transferring.

Wahana Tata also launched a sharia insurance product in late January 2014. Although not yet established as a separate entity or subsidiary, we have created a business unit called Aswata Takaful to serve our sharia venture. Since then, we have been making steady progress with several major sharia banks having signed up with us by the end of 2014.

I believe that in the next 2-3 years, the industry can grow by 15% if we consider Indonesia’s still relatively low insurance penetration. This signifies a massive opportunity in addition to our expectation of the continued growth of the middle class. Other than that, with regards to the aforementioned infrastructure projects, the government has also introduced a new insurance law in late September 2014 stipulating some form of compulsory insurance for the Indonesian market. However, we have yet to learn about its proposed implementation; hence we are to observe further developments.

There remains the challenge for the industry related to the public’s negative mindset about insurance. In the context of our clients, for example, most buy insurance because of compulsory terms or automatic inclusion from the bank related to a business loan. As such, the progress will likely be gradual and we certainly cannot expect everybody to suddenly buy insurance. The prospects for the medium term are dependent on progress made in changing this perception, especially for general insurance. Indeed, the public’s idea and cultural notion about general insurance still falls behind that of life insurance as a necessity.

We have some programs that are carried out to ensure information propagation on the benefits of insurance protection as well as to spread awareness about our products. With the assistance of the Financial Services Authority (Otoritas Jasa Keuangan/OJK), Wahana Tata is also concentrating on the micro-insurance sub-sector to help educate the low to middle-income segment about the importance of insurance. As a matter of internal development, our company is also continuously improving its service quality.  This course of action has been taken because in the case of property and motor vehicle insurance, standard rates for tariffs have already been put in place by the regulatory body. Consequently, competition among insurance providers does not necessarily only concern the price, but also comes down to service quality.

We possess a database and perform data-mining in attempting to analyze insurance consumer patterns and trends.

Particularly for retail consumers, our approach often still involves meet-ups as well as cross-selling with our clients to deliver presentations on protections they previously did not have. Hence, insofar as this remains the most effective way to engage consumers and offer the specific products that they need, these methods will continue to be employed. The corporate market, on the other hand, calls for a different strategy for a number of reasons. Primarily, corporations are typically price-sensitive and the insurance contract is on a yearly basis, thus requiring further efforts to maintain strong client relationships through high-quality services.

Property and motor vehicles are currently our two core areas of business, representing the largest share of our insurance portfolio. We plan to extend our focus on these two markets because there is still ample room for growth. Our company also expects to achieve its highest growth within heavy equipment insurance. Furthermore, if we refer to the government’s plan to carry out infrastructure projects, engineering insurance has significant potential for the future.

We can also learn about the potential of other products, such as liability insurance, through an analysis of successes in other countries. Indonesia’s market for liability insurance is still small, but if we look at developed nations, this type of insurance occupies a more important position; being preferred first over asset protection. The opposite is currently true in Indonesia, though having said that, recent law amendments and heightened public awareness should see more people in this country viewing liability insurance as a necessity.

5 years ago, the islands of Kalimantan and Sulawesi underwent rapid development on the back of the then-high prices of locally-produced natural resources and commodities. At present, this ceases to be the reality with coal and palm oil prices going down and rubber being on the low side. Hence, we consider Java and Sumatra as the most favorable regions.

We expect to have foreign firms wanting to come into Indonesia and attempting to capitalize on Indonesia’s low insurance penetration. As a local company, we must be prepared to face the challenges that this brings. However, it is still a distant concept given that financial services regulations and the regulatory bodies are different between each country. For Wahana Tata, we acknowledge that the Indonesian market is still enormous and we are committed to serving that market rather than opening new branches in other ASEAN countries. We have yet to establish our presence in all Indonesian cities and we plan to use our advantage as an experienced local player to open new markets in smaller cities throughout Indonesia. As a leading insurance company in Indonesia, we always strive for product innovation, and as such we are open to international cooperation within that framework.

Wahana Tata is a company that has surpassed the 50-year mark having gone through some testing times, reflecting an admirable accomplishment in its own right. This achievement is essentially built on the trust and support of our clients and business partners and we hope for this excellent synergy to continue through their continued trust.