Interview with Mr Chandra Purnama of Asuransi Tri Pakarta

Investment | Joint Ventures

Asuransi Tri Pakarta | Mr Chandra Purnama

The challenge is that most people in Indonesia are not insurance minded so this is why there is a need for regulators and insurance associations to work with insurance companies to raise awareness Mr Chandra Purnama, President Director
PT Asuransi Tri Pakarta or ‘Tripa’ was established in 1978 and offers various general insurance products such as motor vehicle insurance, fire insurance, personal insurance and cargo insurance etc. What can you tell us about the current strategies that are being implemented to expand the company and maintain growth as well as profitability? The insurance market in Indonesia is very large and with a lot of potential for all the insurance companies in the country. I was previously a banker and on coming into insurance I spoke to a number of insurance companies in Indonesia on how to approach new markets and rather than compete with each other, to see if we could work together to capture these new markets. The insurance industry is concerned with getting high premiums and as many customers as possible. Therefore we decided to expand from offering only corporate products, which was mainly via bancassurance and government institutions, to also going into retail. We began with focusing on leasing such as for automobiles and products for non institutional or retail clients. The challenge is that most people in Indonesia are not insurance minded so this is why there is a need for regulators and insurance associations to work with insurance companies to raise awareness. The service offered by insurance companies in Indonesia also needs to be improved; it is good for sales but not for managing claims. By improving this the industry can move forward quickly and realise the full potential Indonesia has to offer. I was previously the President Director at Pegadaian and I opened 3,800 branches which transformed the business and I want to bring that same type of thinking to Tripa. People in insurance tend to think about ongoing trends when planning their growth but at Tripa I want to look at growing by 50% and then 100% by capturing new markets for insurance. The results in the first year of my tenure have already been very positive and we have received awards such as from Infobank. The automobile insurance sector has dominated the general insurance sector in Indonesia, what do you believe will be the next area of growth? Within retail and individual insurance there will be significant growth. For example, the middle class is growing and buying houses which require insurance for the property itself as well as insurance for other needs. Therefore within the household and family unit this is where I see there can be tremendous growth. This is not only for Java but on a national scale in Sumatra, Kalimantan and other regions.	The Indonesian insurance sector is proving very attractive to international players such as AXA or Zurich who have already entered the market. How is the company positioned for opportunities as a local partner in the general insurance sector? We believe that the insurance sector is very promising for foreign companies and investors. We have already been approached for partnerships in this area but it is our shareholders who decide whether we go ahead with these ventures. What we would be looking for is capital as Indonesian insurance companies are already experienced in the insurance industry and the culture. I was Vice President Director at Bank Permata when it formed from three banks and Standard Chartered took a share in the bank. We saw that the style of management of the bank was not compatible with the local Indonesian culture and so this took some adjustment. Therefore for new partners they need to understand the Indonesian culture and be able to bring expertise in capturing new business. What can you tell us about the future expansion of the company? Currently we have four branches in Jakarta and this year we added another branch in Manado as well as in North Kalimantan. Next year we plan to add up to 10 new representative offices, for example in Bandung as we only have one representative office and we need to increase our presence there. One of the main challenges is the lack of human resources or professionals within insurance in Indonesia as we need this to expand further. What should potential investors and partners remember as a final thought on the company and the insurance sector in Indonesia? The general insurance market in Indonesia is huge, the problem is just that there is a need to change peoples’ mindsets. I believe that this will happen and it depends on the regulators, associations for general insurance and the general insurance companies in Indonesia. The new Financial Supervisory Board (OJK) which will become active in January 2013 will make a big difference to regulating financial services in Indonesia.

The challenge is that most people in Indonesia are not insurance minded so this is why there is a need for regulators and insurance associations to work with insurance companies to raise awareness

Mr Chandra Purnama, President Director

PT Asuransi Tri Pakarta or ‘Tripa’ was established in 1978 and offers various general insurance products such as motor vehicle insurance, fire insurance, personal insurance and cargo insurance etc. What can you tell us about the current strategies that are being implemented to expand the company and maintain growth as well as profitability?

The insurance market in Indonesia is very large and with a lot of potential for all the insurance companies in the country. I was previously a banker and on coming into insurance I spoke to a number of insurance companies in Indonesia on how to approach new markets and rather than compete with each other, to see if we could work together to capture these new markets.

The insurance industry is concerned with getting high premiums and as many customers as possible. Therefore we decided to expand from offering only corporate products, which was mainly via bancassurance and government institutions, to also going into retail. We began with focusing on leasing such as for automobiles and products for non institutional or retail clients. The challenge is that most people in Indonesia are not insurance minded so this is why there is a need for regulators and insurance associations to work with insurance companies to raise awareness. The service offered by insurance companies in Indonesia also needs to be improved; it is good for sales but not for managing claims. By improving this the industry can move forward quickly and realise the full potential Indonesia has to offer.

I was previously the President Director at Pegadaian and I opened 3,800 branches which transformed the business and I want to bring that same type of thinking to Tripa. People in insurance tend to think about ongoing trends when planning their growth but at Tripa I want to look at growing by 50% and then 100% by capturing new markets for insurance. The results in the first year of my tenure have already been very positive and we have received awards such as from Infobank.

The automobile insurance sector has dominated the general insurance sector in Indonesia, what do you believe will be the next area of growth?

Within retail and individual insurance there will be significant growth. For example, the middle class is growing and buying houses which require insurance for the property itself as well as insurance for other needs. Therefore within the household and family unit this is where I see there can be tremendous growth. This is not only for Java but on a national scale in Sumatra, Kalimantan and other regions.

The Indonesian insurance sector is proving very attractive to international players such as AXA or Zurich who have already entered the market. How is the company positioned for opportunities as a local partner in the general insurance sector?

We believe that the insurance sector is very promising for foreign companies and investors. We have already been approached for partnerships in this area but it is our shareholders who decide whether we go ahead with these ventures.

What we would be looking for is capital as Indonesian insurance companies are already experienced in the insurance industry and the culture. I was Vice President Director at Bank Permata when it formed from three banks and Standard Chartered took a share in the bank. We saw that the style of management of the bank was not compatible with the local Indonesian culture and so this took some adjustment. Therefore for new partners they need to understand the Indonesian culture and be able to bring expertise in capturing new business.

What can you tell us about the future expansion of the company?

Currently we have four branches in Jakarta and this year we added another branch in Manado as well as in North Kalimantan. Next year we plan to add up to 10 new representative offices, for example in Bandung as we only have one representative office and we need to increase our presence there.

One of the main challenges is the lack of human resources or professionals within insurance in Indonesia as we need this to expand further.

What should potential investors and partners remember as a final thought on the company and the insurance sector in Indonesia?

The general insurance market in Indonesia is huge, the problem is just that there is a need to change peoples’ mindsets. I believe that this will happen and it depends on the regulators, associations for general insurance and the general insurance companies in Indonesia. The new Financial Supervisory Board (OJK) which will become active in January 2013 will make a big difference to regulating financial services in Indonesia.

Global Business Guide Indonesia - 2013