AON, CIMB team up for insurance services
Monday, 23 April 2012 | 11:00
Bank CIMB Niaga (BNGA) has agreed to team up with insurance broker PT AON Indonesia to provide insurance services to the bank’s clients in the shipping business.
Under the cooperation agreement signed in Jakarta on Friday, AON Indonesia will provide insurance services to shipping companies receiving loans from the bank.
BNGA’s banking and sharia commercial director, Handoyo Soebali, said the partnership would help mitigate the risk of the bank’s financing facilities for shipping companies.
Besides covering the risk, the insurance company would also help choose the right insurance packages for the bank’s clients, he said. “Shipping insurance has complicated procedures and needs a high degree of thoroughness,” Handoyo said prior to the signing ceremony on Friday.
He cited the recent case of the Costa Concordia cruise ship, which sank in Italy early this year, in which many parties experienced difficulties in claiming their insurance due to a variety of specific clauses.
“Therefore, we need a firm with skills in shipping insurance, such as AON Indonesia,” he added.
Through the partnership, the BNGA is aiming for its shipping funding loans to reach Rp 5 trillion (US$545 million) over the next two years, said Tito Sudiarto, lending product specialist with Indonesia’s fifth-largest lender.
The target is double its 2011 figure, where the BNGA saw its shipping financing value reach Rp 2.5 trillion, up 31.5 percent from Rp 1.9 trillion in 2010.
Looking ahead, Handoyo said shipping funding had huge potential despite making up only between 2 and 3 percent of the publicly listed bank’s total loans, with agriculture, mining and the automotive industry as its main loan-distribution sectors.
He attributed the high potential to the government’s decision last year to impose the cabotage law, requiring vessels operating in Indonesian waters to be locally owned.
He also said that thanks to the trickle-down effect of mining, other sectors related to mining, such as infrastructure and transportation, were also growing in sync with mining sector growth.
Indonesia is the world’s largest coal exporter, with 275 million tons of coal produced in 2010.
Currently, the BNGA mostly provides loans to vessels carrying palm oil and mining products, such as coal, with Jakarta, Batam and East Kalimantan as their main operating hub.
Tito said 66 percent of the vessels are based in Jakarta, with 18 percent in Batam and the remaining 16 percent in East Kalimantan.
The partnership involves five insurance firms, which come under one consortium: PT Asuransi Sinar Mas, PT Asuransi Jasindo, PT Asuransi Central Asia Raya (ACA), PT Asuransi Wahana Tata and PT Asuransi Jaya Proteksi (Japro).
Source: Jakarta Post