"With total assets of Rp6 trillion after the merger, Indonesia will have a large and sturdy reinsurance company that makes IndonesiaRe the largest reinsurance company in ASEAN," the President Director of IndonesiaRe, Frans Y. Sahusilawane, said here on Thursday.
The signing of the merger agreement between ReIndo and IndonesiaRe was witnessed by the Deputy Minister of State-Owned Enterprises for Financial Services, Survey and Consultants, Gatot Trihargo, and the Director of the Chief Executive of the Finance Service Authority, Firdaus Jaelani.
According to Frans, the merger process was initiated through the establishment of a subsidiary company, PT Reasuransi Syariah Indonesia in order to transfer ReIndos reinsurance business portfolio.
After the merger, IndonesiaRe will run reinsurance businesses, which will be supported by two subsidiaries, namely Insurance Asei Indonesia, in-charge of general insurance and Reasuransi Syariah Indonesia, which is engaged in Sharia reinsurance.
"The establishment of a national reinsurance company is a government policy that will tackle the current account deficit," he said.
The bigger and stronger national reinsurance company is expected to reduce capital outflow of reinsurance premiums, which are estimated to reach Rp20 trillion annually.
"The potential of the reinsurance market in Indonesia is very large in terms of premiums, which are in line with Indonesias gross domestic product and penetration rates that are still lower than other ASEAN countries, such as Malaysia, Thailand and Vietnam," Frans said.
The national reinsurance company will target a premium income of about Rp9 trillion by 2017, up from the projected premiums in 2016 of about Rp6 trillion.(*)
Editor: Heru Purwanto
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