Amin highlights sharia insurance industry’s challenges, opportunities

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Vice President Ma’ruf Amin highlighted future challenges and opportunities of the national sharia insurance industry amid implementation of ASEAN Framework Agreement on Services (AFAS) aimed at eliminating restrictions to trade in services among ASEAN countries.

“On one hand, the domestic sharia insurance industry is required to compete with foreign rivals in the domestic market, while on the other hand, it (the AFAS implementation) increases prospects for the Indonesian sharia insurance industry to expand its market to other ASEAN member states,” Amin stated while addressing the 19th anniversary of the Indonesian Sharia Insurance Association (AASI) in Jakarta on Thursday.

The ability to penetrate the insurance market is hinged on the industrial capacity. The national sharia insurance companies should be able to capitalize on the momentum by preparing themselves to be more competitive and efficient, so that they can compete and lead the regional sharia insurance market, he affirmed.

To that end, he urged AASI to encourage sharia financial literacy, particularly about sharia insurance, among members of the public; make the most of digital technology to strengthen the Indonesian sharia insurance industry; and create attractive products for Indonesia’s productive generation.

In addition, the vice president called on the AASI to improve the quality and capacity of human resources in the field of sharia finance and insurance and take active part in supporting micro, small, and medium entrepreneurs (MSMEs) in terms of business protection and literacy.

“Sharia insurance can also encourage sharia financial inclusion by targeting the middle to lower class population that makes up the large market through micro insurance products. There is a lot of evidence that the industry is successfully engaged in micro products. Hence, micro products, with an unburdening and affordable payment system, must be innovated,” he remarked.

Amin believes that the sharia insurance industry can thus operate in the right market, as it can offer products that the conventional insurance industry is unable to provide.—Antara

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