FEM and CIBEST at IPB University Discuss Strategies to Strengthen the Sharia Insurance Ecosystem in Indonesia
The Faculty of Economics and Management (FEM) and the Center for Islamic Business and Economic Studies (CIBEST) at IPB University held a “Focus Group Discussion (FGD) on Sharia Insurance Industry Strategies Toward the Sustainability of the Sharia Financial Ecosystem” at the Grand Savero Hotel in Bogor (10/1).
The event involved the Deposit Insurance Corporation (LPS), the Financial Services Authority (OJK), the Indonesian Sharia Insurance Association (AASI), and the National Sharia Council of the Indonesian Ulema Council (DSN-MUI).
The Chairperson of CIBEST at IPB University, Dr Laily Dwi Arsyianti, stated that the event aimed to identify the role and challenges of the Islamic insurance industry, map out relationships among stakeholders, and formulate strategies for strengthening the industry and exploring collaboration opportunities to support the development of the Islamic financial ecosystem in Indonesia.
The discussion revealed that the sharia insurance industry has significant potential for growth but still faces challenges in the form of low levels of financial inclusion, financial literacy, and public trust.
Yurivanno Gani, CEO of PT Asuransi Takaful Keluarga and Chair of the IT, Operations, and Human Capital Division at AASI, emphasized the urgency of collaboration among Muslims in promoting public understanding of Sharia values and principles, including the use of Sharia compliant financial instruments.
“Currently, insurance coverage limits are still restricted, so the projects that can be covered are also limited. The support of the Indonesian public in growing the takaful sector is urgently needed so that we can provide assistance with broader coverage,” he said.
In line with this, Ir H Agus Haryadi, AAAIJ, FIIS, ASAI, Chair of the Non-Bank Financial Industry Division at DSN-MUI, explained that the public’s perception of insurance companies which tends to view them as purely business-oriented remains a challenge in building trust.
“Therefore, it is necessary to strengthen the capacity of insurance companies by increasing equity and developing innovative products relevant to public needs, including those in the MSME (micro, small, and medium sized enterprises) sector, agriculture, Hajj and Umrah, the halal industry, and social finance,” he added.
He also emphasized the role of civil society organizations (CSOs) in increasing the penetration of takaful/Sharia insurance. The term “takaful” also needs to be promoted because it is more in line with the nature of Sharia insurance, which encourages mutual aid, compared to the term insurance which elicits a negative response, particularly among religious communities.
Dr H Suwandi, Executive Director of Insurance Surveillance, Inspection, and Information at the LPS, further elaborated on the importance of accelerating the implementation of the Policy Guarantee Program (PPP), which is currently being designed to support the insurance industry in building public trust.
On the other hand, Kris Ibnu Roosmawati, Director of Sharia Insurance and Sharia Reinsurance Supervision at the OJK, highlighted the importance and critical role of a coordinator who orchestrates synergy among the parties involved, as well as the division of roles and authorities among institutions.
The OJK focuses on regulation and supervision to ensure the industry operates soundly, while efforts to strengthen financial literacy and inclusion need to be supported by agencies with specific mandates and dedicated budgets in these areas. For now, the National Committee on Sharia Economics and Finance (KNEKS) serves as the coordinating body, but its scope of action remains limited.
Through this FGD, the importance of collaboration between the OJK, DSN-MUI, LPS, KNEKS, the government, the industry, academics, civil society organizations, and other stakeholders each according to their respective roles was emphasized. (*/Rz) (IAAS/HNY)
