NEWS DETAIL
Retail Segment May Dominate Catastrophic Insurance
JAKARTA: The sales of catastrophic insurance product to the retail segment may exceed those sold to corporate segment.
PT Maipark Indonesia's President Director Frans Y. Sahusilawane said corporate segment, as for now, is still dominating the sales of such product with 70% portion, while only 30% of natural disaster insurance products marketed to retail segment.
“Corporate segment is currently dominating natural disaster insurance profile, particularly in risk protection 
against earthquake, as they are cautious on earthquake risk. However, there is an indication that retail will grow larger than corporate,” he said yesterday.
Currently, many general insurance companies begin to enlarge the retail segment composition, as the risk management in this segment is lower and becomes a distinctive attraction for insurers. In addition, retail consumer is relatively more loyal than corporate consumer.
“Retail consumers tend to extend their insurance contract every time there is a renewal treaty. They will not move to other company if they are not disappointed. Meanwhile, corporate consumer can easily move,” he said.
Maipark is a natural disaster insurance pool that obtains businesses from loss insurance companies engaged in earthquake insurance business. About 10% of natural disaster insurance businesses in the industry are handed over to Maipark.
The company booked IDR140 billion of premiums throughout last year, 15% higher from the same period in 2010. Meanwhile, the total claims paid by Maipark reached 96 billion last year.
More than 50% of claims paid last year was advanced claims from Padang earthquake in 2009. In 2011, Maipark paid IDR5 billion insurance claims for Bali earthquake 2012.
The Capital Market and Financial Institutions Supervisory Agency's Head of Insurance Bureau Isa Rachmatarwatta said catastrophic event is now common and must be anticipated by the industry.
The company in insurance industry needs to prepare the capacity, both technical and capital.
Such capital can be increased through conventional method, i.e. gradually establishing reserve or purchasing additional protection to outer party namely reinsurance company. “It should be combined,” he said.
Source: Bisnis.com
