Tugure Highlights Challenges in Reinsurance Industry Equity Growth

Industry Faces Multiple Obstacles

PT Tugu Reasuransi Indonesia (Tugure) has identified significant challenges that could impact the reinsurance industry's ability to increase equity in the coming period. According to Eko Susanto, Corporate Secretary Group Head at Tugure, the industry faces several key obstacles.

Capital Constraints and Global Competition

The company highlights that limited capital remains a primary concern for industry players. This constraint is compounded by intense global competition from larger reinsurers that possess greater financial resources and superior technical capabilities. The global competition creates a challenging environment for Indonesian reinsurance companies to expand their capacity and market share.

Digital Transformation Needs

Another significant challenge is the need for substantial investment in digital transformation. This includes both technology infrastructure and human resource development. The reinsurance industry must adapt to rapidly evolving technological landscape to remain competitive and efficient in risk management and claims processing.

Macroeconomic and Regulatory Challenges

The industry also faces macroeconomic risks including potential inflation and high interest rates. These factors can significantly impact investment returns and overall financial stability. Additionally, the increasing complexity of risks being underwritten requires more sophisticated risk management systems.

New Accounting Standards

The implementation of new accounting standards (PSAK 117) presents another challenge for industry players. This change requires companies to adapt their financial reporting and accounting practices, potentially impacting their financial statements and capital management strategies.

Looking Forward

Tugure's observations highlight the complex landscape that reinsurance companies must navigate. Addressing these challenges will require a multi-faceted approach, including strategic capital management, technological investment, and adaptation to evolving regulatory requirements.