Semakin Dekat dan Mengenal Konsep Reasuransi

Summary

In the first episode of the Indonesia Re podcast, hosted by Ira Azika, the guest speaker, Mr. Widio Primastowo, delves into the world of reinsurance. He explains the key differences between insurance and reinsurance, the mechanics of treaties, and facultative reinsurance. Emphasis is placed on the significance of treaties for insurance companies, with a focus on the renewal process. The discussion highlights the complexities of reinsurance in Indonesia, the impact of global trends, and Indonesia Re's role as both a partner and consultant to insurance companies, ensuring sustainable and profitable treaty agreements.

Takeaways

• 😀 Reinsurance is insurance for insurance companies, where risks are shared between insurance companies and reinsurance firms.
• 😀 The primary difference between insurance and reinsurance is that insurance companies deal directly with individuals or businesses, while reinsurance only deals with other insurance companies.
• 😀 Reinsurance companies provide coverage for insurance companies through two main types: treaty (automatic) and facultative (case-by-case).
• 😀 Treaty reinsurance (TRTI) is an agreement where the reinsurance company automatically covers the risks of policies issued by the insurance company, usually for one year.
• 😀 The treaty reinsurance agreement is mandatory for insurance companies in Indonesia and regulated by the Financial Services Authority (OJK).
• 😀 The reinsurance process is heavily influenced by the risk profile and business plans of the insurance company. Different insurers have different needs, and reinsurance is tailored accordingly.
• 😀 Proportional reinsurance involves sharing a set percentage of the risk between the insurer and reinsurer, while non-proportional (excess of loss) covers claims above a certain threshold.
• 😀 Reinsurance agreements typically last for 12 months, but the start dates can vary (e.g., January 1, April 1), with renewal periods defined as inception and expiration periods.
• 😀 Renewal seasons, particularly on January 1 and April 1, are critical times in the reinsurance industry, often impacted by global market conditions such as hardening markets.
• 😀 Indonesia Re emphasizes transparency and market communication, holding events like forums and webinars to share updates and underwriting guidelines, ensuring the sustainability of reinsurance treaties for both parties.

Q & A

What is reinsurance, and how does it relate to insurance?

Reinsurance is essentially insurance for insurance companies. It involves transferring part of the risk portfolio held by an insurance company to a reinsurance company, which helps the insurer manage risk more effectively.

How does reinsurance differ from insurance in terms of customer interaction?

While insurance companies engage with both individuals and businesses (B2B or B2C), reinsurance companies only operate on a business-to-business (B2B) basis, dealing exclusively with insurance companies, not the general public.

What are the two main types of reinsurance agreements mentioned in the script?

The two main types of reinsurance agreements are 'Treaty' and 'Facultative'. Treaty reinsurance covers a risk pool automatically, while Facultative reinsurance is handled on a case-by-case basis.

Can you explain what 'Treaty' reinsurance is?

Treaty reinsurance is a long-term agreement where a reinsurance company automatically covers a specified range of risks from the insurance company for a set period, typically one year.

What is the difference between proportional and non-proportional reinsurance?

Proportional reinsurance involves sharing a percentage of the risk between the insurance and reinsurance company, while non-proportional reinsurance, like 'Excess of Loss', covers losses beyond a certain threshold set by the insurance company.

Why is 'Excess of Loss' reinsurance important for an insurance company?

'Excess of Loss' reinsurance is important because it helps insurance companies limit their liability for large claims. The insurance company will only cover a predefined portion, and the reinsurance company covers losses above that threshold.

Is reinsurance mandatory for all insurance companies in Indonesia?

Yes, reinsurance is mandatory for all insurance companies in Indonesia. According to regulations set by the Financial Services Authority (OJK), every insurance company must have a treaty agreement with a reinsurance company.

What is the role of risk profiles in reinsurance agreements?

Risk profiles are crucial in reinsurance because they help the reinsurance company evaluate the level of risk an insurance company faces. This, in turn, influences the pricing and structure of the treaty agreement.

How does Indonesia Re design its reinsurance treaties?

Indonesia Re designs its reinsurance treaties by evaluating the risk profile of each insurance company. The company considers factors such as business plans, marketing strategies, customer bases, and underwriting capabilities to create customized solutions.

What is the significance of the 'renewal season' in the reinsurance industry?

The renewal season, which typically occurs on specific dates like January 1 and April 1, is significant because it is when many insurance companies renew or extend their treaty agreements with reinsurance companies. This period is affected by global market conditions, such as a hardening market.