Indonesia: More insurers reveal decision on takaful windows
Source: Middle East Insurance Review | Jan 2024
Three insurance companies have submitted work plans (RKPUS) related to the spin-off of their shariah business units (UUS), according to the Financial Services Authority (OJK).
“There are two companies that will transfer their shariah unit portfolio to other shariah insurance companies and one company that will spin off UUS by establishing a new company,” said OJK insurance, guarantee, pension fund supervision chief executive Ogi Prastomiyono in a statement.
Regulations state that companies that have shariah business units are required to submit changes to their RKPUS no later than 31 December 2023. Insurance companies that have UUS are required to carry out a separation or spin-off before 31 December 2026.
Several insurance companies have plans to spin off their takaful windows. For instance, two insurance companies affiliated to the Astra Group - Asuransi Astra Buana (Astra Insurance) and Asuransi Jiwa Astra Life - stated that they were ready to comply with the UUS regulations.
The most recent spin-off was carried out by German global insurer Allianz. Its new Asuransi Allianz Life Syariah was launched in November 2023.
Indonesia’s insurance law, promulgated in 2014, requires insurers to separate their takaful windows from their conventional insurance operations. Several of the insurers had waited for detailed regulations regarding spin-offs, such as the sharing of services with the parent company.
According to information on the website of the Shariah Insurance Association of Indonesia, there are currently 20 life and 19 non-life takaful windows.
As for fully-fledged shariah-compliant (re)insurance companies, there are nine family takaful companies, six general takaful companies and four retakaful providers.