ASEAN Insurance Council (AIC) Invites Insurers to Support the Government on Financing the ASEAN Economic and Sustainable Development

JAKARTA, Indonesia, Oct. 25, 2018 /PRNewswire/ -- AIC, a regional platform for the ASEAN insurance industry, announced a strategic commitment to invite all leading insurers taking real action to accelerate Indonesia's infrastructure investment, at the IMF -- World Bank Group (WBG) 2018 Annual Meetings in Bali, Oct 11, 2018. As key drivers of regional connectivity in ASEAN, the declaration has proved to be a major call-to-action for insurers as, after the declaration, leading insurance companies, WanaArtha Life, AIA, Allianz Life, and Taspen, invested US$224 million dollars in a state-controlled toll road operator, Jasa Marga, through PT. Mandiri Manajemen Investasi. 

Prior to this signing ceremony, AIC participated in the SDG Indonesia One platform, initiated by the Indonesian Ministry of Finance in partnership with a state-owned company, PT Sarana Multi Infrastruktur (SMI). During the IMF -- World Bank Group 2018 Annual Meetings, AIC also acted as a speaker at a financing infrastructure discussion, unveiling a call-to-action to encourage insurers to invest more in infrastructure.

"The ASEAN Life Insurance industry manages assets of US$438 billion and this will increase substantially as premiums grow in the years to come. However, they are estimated to distribute only 2% for infrastructure. If the community commits to increase the share of assets being allocated to infrastructure, this will make a significant contribution to the ASEAN infrastructure financing gap," said Evelina F. Pietruschka, Secretary-General of AIC.

ASEAN countries are now very aggressively promoting the infrastructure to support the ASEAN connectivity. However, a significant infrastructure financing gap has appeared. It is estimated that ASEAN will have a $1.153 trillion infrastructure gap according to 2016 data from HSBC. Only Singapore who have a $27 surplus, while others such as Malaysia will have $42 million infrastructure gap; Thailand, $86 million; Vietnam, $160 million; Philippines, $171 million; and Indonesia will have a $721 million infrastructure.

As the largest ASEAN market, Indonesia chases over US$150 billion, out of US$327 billion pipeline by 2019, to help develop public works and infrastructure." That's an enormous number for the government to fund. They need to focus more directly on public-private partnership (PPPs), through long-term institutional investors, such as insurance," added Evelina.

These efforts also highlighted that blended finance schemes, or the merging of public and private funds to facilitate private capital for the public sector, is a promising solution to Indonesia's infrastructure deficit. "We need to develop a regulation to accommodate blended financing for infrastructure, as only 25 percent of Indonesia's infrastructure funding comes from the government," said Evelina.

AIC is consistently involved in numerous international conferences, including Asia-Pacific Financial Forum (APFF) and World Economic Forum (WEF) to influence all insurance sectors throughout ASEAN. Following this ceremony, AIC will organize the 3rd ASEAN Insurance Summit 2018 which will take place in Sasana Kijang, Bank Negara Malaysia on November 28, 2018.

About ASEAN Insurance Council (AIC)

AIC, is an organisation under ASEAN which is focused primarily on the insurance industry and its related matters. It was formed as a PPP funded by the private sector and worked closely with ASEAN insurance regulators and related government agencies. It was established during the ASEAN meeting on 4 April 1978 in Jakarta, whose membership consisted of all ASEAN member states at the time. The objectives of the organisation are to promote and stimulate the development of the insurance industry within ASEAN as well as to build relationships among insurance companies in ASEAN.

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Media Contact:

Bern Dwyanto
Executive Director
ASEAN Insurance Council Permanent Secretariat
Tel: +62-21-2906-9760

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