Islamic Finance

Zurich converting Indonesia insurance unit to become general takaful company

Zurich Insurance Group is converting its business in Indonesia to become a general takaful company, subject to regulatory approval, it said in a statement on June 25.

The move comes after Zurich acquired 80% of PT Asuransi Adira Dinamika Tbk in November.

The conversion to become Shariah-compliant will enable Zurich to provide a range of products and solutions for the market, it said.

“Indonesia is an important market for Zurich. We have strong ambitions to expand and grow our Syariah, general and life insurance businesses,” said Zurich Insurance Indonesia CEO Hilman Simanjuntak.

Zurich’s Shariah-compliant general insurance company is expected to be operational by 2021 under the name PT Zurich General Takaful Indonesia (ZGTI).

When the conversion is completed, Zurich Insurance Indonesia customers will have the choice to renew their conventional policy contracts with Adira Insurance or change to a takaful policy with ZGTI.

Zurich Indonesia currently provides life insurance solutions through PT Zurich Topas Life (ZTL) and general insurance through Adira Insurance.

As of November last year, Shariah-compliant life insurance premiums grew by 4.5% to 11.98 trillion rupiah ($862 million), according to data from the Financial Services Authority (OJK).

Chairperson of the Shariah Insurance Association of Indonesia (AASI), Ahmad Sya’roni, told local press in January that he expects the contribution of the takaful sector in 2020 to grow by 10%.

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