MANAJEMEN RISIKO DALAM INDUSTRI ASURANSI

Prof. Roy Sembel, PhD Twitter / Instagram: @ProfRoySembel LinkedIn / Facebook: Prof. RoySembel

PROF. ROY SEMBEL, IR, MBA, PHD EDUCATION 1982-86 IPB, Bogor. FMIPA. Major: Statistics, Minor: Economics; Ir., Best Graduate, Cum Laude 1988-90 Rotterdam School of Management, Erasmus University Rotterdam and The Wharton School, University of Pennsylvania Philadelphia; MBA, Finance/Banking, Best Graduate, With Honours 1991-96 J.M.Katz Graduate School of Business, University of Pittsburgh; Major: Corporate Finance; Minor: Econometrics; PhD; Dissertation: “IPO Anomalies, Truncated Excess Supply, and Heterogeneous Information”

WORK EXPERIENCE 1984-87 Teaching Assistant, FMIPA, IPB. 1990 Internship; ABN Bank, European Treasury Department, Amsterdam. 1990-91 Corporate Banking; ABN AMRO Bank Amsterdam 1994-96 Teaching Assistant, University of Pittsburgh. 1994-2000 Co-founder Indonesian Physics Olympic Team /TOFI Foundation & Indonesian Computer Olympic Foundation TOKI 1997-98 Economics & Finance Staff, Office of Dr (HC) Radius Prawiro, Jakarta. 2000 ACUCA Lecturer: Japan, South Korea, Taiwan, Hong Kong, The Philippines, Thailand 1987-Now Lecturer, Faculty of Economics, Christian University of Indonesia, Jakarta. 1997-2001 Visiting Lecturer at IPMI, Institut PPM, Magister Management Program University of Indonesia, University of Sam Ratulangi, Universitas Lampung, Magister Akuntansi & Post Graduate (S2 & S3) Program Faculty of Economics University of Indonesia, Pelita Harapan University. Subjects: Investment Analysis and Risk Management, Corporate Finance, International Finance, Derivative Securities, Managerial Economics, Banks & Capital Markets, eBusiness Management. 2 2

1998-2001 McKinsey & Co, Jakarta 2001-2006 Direktur Program Magister Manajemen Keuangan Universitas Bina Nusantara, Cofounder Indonesia Learning Institute (InLIne), Indonesia School of Life (InSchoOL) 2005-2007 Komisaris Independen & Ketua Komite Pemantau Risiko PT Bank Niaga Tbk 2005Professor in Financial Economics; Charter member Lembaga Komisaris dan Direksi Indonesia 2006-2008 Academic Expert Advisor, Universitas Ciputra Surabaya, 2006Owner/Komisaris (PT. Capital Price Indonesia, PT MARS Indonesia) 2007Supervisory Committee Asian Bond Fund Indonesia (TCW Bahana/BI), Ketua Komite Sertifikasi FPSB Indonesia 2007-2008 Pejabat Dekan FE Universitas Multimedia Nusantara (UMN) 2008 Board of Advisor UMN 2008-2010 Chairman CAPITAL PRICE 2009-2010 Dean of Business School and Director of Graduate Program, UPH 2010-2012 Director of Jakarta Futures Exchange 2012-2015 Senior advisor, Vriens & Partners 2012IPMI International Business School, Professor, Head of Research, Dean 2013Komisaris Independen PT HIT, Komisaris Utama PT MCS International 2014Ketua Komite Indeks Investor 33; Member of Advisory Council, PLN CorpU 2015Komisaris Independen, PT MNC Life

MISCELLANEOUS Speaker in many seminars in Indonesia, USA, and Europe. Writer of more than 1000 articles in KONTAN, GATRA, Sinar Harapan, SWA, Bisnis Indonesia, KOMPAS, Investor, Investor Daily, Warta Ekonomi, Manajemen & Usahawan Indonesia, InfoBank, Jurnal Pasar Modal, Media Akuntansi, DIA, Bahana, International Research Journal 3 and Economics, Journal of Business Management, Jurnal Ekonomi UKI, JAKI, JBR, Scripta Economica of Finance 3 UPH, Jurnal, Sinergi MMUII, published books, Internet.

KOMUNIKASI:

E-mail: [email protected]  LinkedIn: Prof. Roy Sembel  Twitter / Instagram: @ProfRoySembel  Facebook: Prof. Roy Sembel  E-Newsletter: [email protected] 

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TALKING POINTS 

CONTEXT 0F RISK MANAGEMENT



CONCEPT



CONCLUDING REMARKS

HUKUM MURPHY If anything can go wrong, it will go wrong if you try to please everyone, some one will surely be disappointed Leave to itself, thing will go from bad to worse Murphy is an optimistic person



Fundamental change in the way we live & behave MATRIX •

WIRELESS + INTERNET

• 1+1=2 • Two separate revolutions • Wireless datacom enabling technologies • Change in human behavior

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WIRELESS SERVICE REVOLUTION

• 1+1>2 • Wireless and datacom enhance each other • Standards drive massive application and service development • Revolution in human behavior and society

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• • Datacom is everything. Everything is wireless • All “gadgets” are addressable in one uniform network • Change beyond imagination

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THREE KEYS OF THE NEW ECONOMY •Interaction costs •Transformation costs

• More choices • 24-hour services • Just a ‘click’ away

• More and faster

interaction & transactions

The rise of the new economy

• Faster natural selection • ‘Sticks and carrots’ to become more eficient & inovative 9

Transparency & Competition

• Globalization dan localization •Unbundling & reassembling business organization, government, financial instruments

HIGHER RETURN & RISK

危机 10

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GOOD NEWS AND BAD Prof.NEWS Roy Sembel, GOOD NEWS:  + GDPGROWTH: Chindonesia  + GDP / CAPITA ~ US$ 3600  + G 20, Rank 16th or 9th  + PEACEFUL DEMOCRACY  + NATIONAL HERRITAGE  + MOBILE PHONE > 250MN  + ALTERNATIVE ENERGY  + BB+  BBB (INV GRADE)  + CURRENCY RESERVES>$ 100B  + MIDDLE CLASS $10-20/DAY INCR 5 X IN 10 YEARS  + DEMOGRAPHIC DIVIDEND  + DIRECT INVESTMENT > $30 B  + CAR SALES > 1 MN UNITS •

• • -

• -

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BAD NEWS:Ph.D - DECREASING EXPORT < $200 B VOLATILE IDR & IHSG HIGH UNEMPLOYMENT CENTRALIZED GROWTH HDI RANK - CORRUPTION PERCEPTION INDEX DEFORRESTRATION EASENESS OF DOING BUSINESS INDEX DISTRIBUTION OF INCOME INFRASTRUCTURE MARKET DISTORTION FUNDING COST AVAILABILITY OF ENERGY (ELECTRICITY, OIL, etc) LOW PERFORNANCE-BASED CULTURE LOW DOMESTIC INVESTOR BASE 11

SWOT ANALYSIS for the Economy STRENGTHS: Biodiversity: Land, Sea/River Natural resources, mining, oil & gas 12 month sun Marine resources Natural beauty, arts, cultural diversity Population 255 million Geographical location Demographic Bonus WEAKNESSES: Cryonism (KKN) Law enforcement Low Human Development Index Lack of hard infrastructure Market distortion Weak public relations Politics in transition

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OPPORTUNITIES: Emerging Asia Recovery of US Economy ICT growth Intra ASEAN cooperation WTO / AFTA Low energy price

THREATS: Global financial / economic crisis Terrorism (Physical / Economy) Epidemic/Pandemic virus/bacteria Volatility of Commodity prices Natural disasters

PROSPECT OF ECONOMY •

Still single digit interest rate

•

Global uncertainty

•Domestic Stocks  Long-term investment, short-term trading •EBA, REITs, Property

•

GDP per capita ~ $ 3600

•Risk management / hedging •

Volatile IDR

•Gold, Currency  Trading •

GDP growth still 4%-5 %

•

Inflation ~ 5%-6%

•Business that leverages social media

•

Mobile phone > 250 juta

•Travel, Tourism, Transportation

•

Infrastructure development

•

Domestic consumption / Rising middle class

•Infrastructure, alternative energy, modern retail outlet, international-quality education, hospitals/healthcare, etc.

•

Demographic bonus / dividend

•Insurance Prof. Roy Sembel, Ph.D

TALKING POINTS 

CONTEXT 0F RISK MANAGEMENT



CONCEPT



CONCLUDING REMARKS

RISIKO RISIKO ??

RISKY Wealth R

I

S

K

Y

Wealth

IT IS CRUCIAL TO MANAGE THE RISK-RETURN PROFILE

Risk and Risk Management? 

Definition of Risk – Risk is uncertainty – Risk includes upside volatility – Risk is deviation from expected



Risk Management – – – –

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Balancing risk and reward Balancing art and science Balancing process and people Risk Management is ultimately about people

Evolution of Management’s View of Risk to BOARD ROOM

from BACK ROOM 

Risk monitoring is a low level function of the internal auditors



Risk monitoring is the CEO’s Job (with Board oversight)

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Risk: negative factor to be controlled

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Risk as an opportunity

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Risk managed separately in organizational silos

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Risk managed in an integrated, enterprise-wide fashion

Responsibility for risk mgt is delegated to lower levels



Risk mgt is responsibility of senior/line management

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Quantification of risk

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Risk management is built into all corporate management systems

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 

Risk measurement is subjective Unstructured and divergent risk management functions

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ERM menurut COSO “… a process, effected by an entity's board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risks to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives.”

Source: COSO Enterprise Risk Management – Integrated Framework. 2004. COSO.

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ERM Definitions  

 

 

A process, ongoing and flowing through an entity Effected by people at every level of an organization Applied in strategy-setting Applied across the enterprise, at every level and unit, and includes taking an entity-level portfolio view of risk Designed to identify potential events affecting the entity and manage risk with in its risk appetite Able to provide reasonable assurance to an entity's management and board. Source: COSO Enterprise Risk Management – Integrated Framework. 2004. COSO.

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Traditional Risk Management vs ERM SCOPE

• Narrow, Pure Risk •Tangible Asset

STRATEGY

• Primarily Insurance Solutions

FOCUS

• The ‘down-side risk’, lack of total risk portfolio

• Enterprise Wide, Pure & Speculative Risk • Tangible & Intangible

• Comprehensive Solutions • Protection and Value Creation • Total risk portfolio which affects bottomline, both ‘down-side’ and ‘up-side’ risk 21

Risk management across sectors Insurance Companies

Commercial Banks

Security Firms

Primary Risks

Technical risk (liability risk) & Investment risk (asset risk)

Credit risks & funding liquidity risk

Market risk & liquidity risk

Typical Time Horizon

Long-term (often multiple years)

Medium-term (usually one year)

Short-term (often 1 to 10 days)

Risk Measurement

Quantitative (actuarial) techniques to calculate size of necessary technical provisions

Quantitative models calculate economic capital necessary to absorb unexpected credit loss at target confidence level

Value-at-risk and stress testing methodologies for market & liquidity risk

Risk limiting and sharing via deductibles, reinsurance & ART

Asset and Liability management

Credit risk minimized through collateral and master netting agreements

Technical provisions as estimate of foreseeable claims while capital covers unexpected losses

Loan loss reserves to cover expected losses and capital to cover unanticipated losses

Holding capital rather than reserves because valuation on a mark-to-market basis

Provisions much higher than Capital

Capital usually higher than Reserves

Capital much higher than Reserves

Asset and Liability management Provisions / reserves vs. Capital

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Risk Identification

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Supervision across sectors Insurance Companies Capital regulation / solvency regime frameworks

(1) Risk-Based-Capital (USA, Canada, Japan and others)

Commercial Banks Basel Accord

(2) Index based solvency regime (EU and others)

Security Firms (1) Net Capital approach (USA, Canada, Japan, and others) (2) EU Capital Adequacy Directive, based on Basel Accord Amendment for market risks

Overall concern Soundness of individual insurers, not just system as a whole

Stability of system as a whole rather than preserving individual banks

Accounting conventions

Variety of different approaches

Historical cost approach

B/S Focus

Liability side of balance sheet

Asset side of balance sheet

Ratio actual vs. required capital

Actual capital often several times minimum required level

Usually hold no more than 150% of their capital requirement

Capital frameworks

Different definitions of eligible capital, charges applied to individual risks, aggregation methodologies of these charges, and scope of application of framework (to individual firms, groups of firms or consolidated groups)

Marked-to-market

¢ Supervision differs significantly by sector and regions

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WISDOM for Risk Management WATAK: IMPIAN/INGIN: SIASAT: DIDIK: OTAK/OTOT: METER: MONITOR

MANAJEMEN

SWOT SMARTER Goal

Grand strategy Capacity Building Work smart, Work hard

Measurement Monitor implementation Resources Allocation

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CAPACITY BUILDING FRAMEWORK CULTURE

Hardware

Software

Leadership

Marketware

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Brainware

Common Goal

Risk Governance Framework Laying down the foundation…

Risk Management Awareness & Culture

Risk Governance Framework

Risk Language Definition of Risks

Risk Philosophy Basic attitude towards risk, should be aligned with Vision & Mission and Business Strategy.

Risk Management Risk Management Policies Organization & Functions

Risk Tolerance/Appetite The level of risk the company is willing to accept in order to achieve its Business Strategy. The desired Risk Profile of the Enterprise

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Risk Governance Framework

Risk Management Process

Risk Manag ement Risk Management Process

Identify & Map Monitor & Report



Credit

 Where?



Operational vs Oversight

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Market/

 The



Regulatory

Financial

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Risk owner?

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Exposure vs Actual

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Liquidity

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Control?

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Early warnings

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Operational



Strategic

Identify Monitor

cause?

Risk Treatment

Measure & Evaluate

 Accept,



How much?



Individual vs organization-wide

Mitigate, Avoid, Exploit, Transfer

Manage

Assess



Contingency Plans



Provisions & reserves



What if scenarios



Improvement of business strategies, control and processes



Normal vs. crisis



Range of measurement methods & tools

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Risk Manageme nt Infrastruct ure

TALKING POINTS 

CONTEXT 0F RISK MANAGEMENT



CONCEPT



CONCLUDING REMARKS

PERSEPSI ASURANSI ? PERNAH “TERTIPU” DIKEJAR AGEN PENJUAL SULIT MENGAJUKAN KLAIM ISU KEBANGKRUTAN

MAHAL ASURANSI JIWA: MELANGGAR ‘KODRAT’ NASIB TAK BISA DIUBAH

ASURANSI =

BEAST

SOSIALISASI & SERTIFIKASI Identify target audiences & Customized message to each audience Utilize ICT / SocMed Cooperation with: Media Academics Opinion builder Association Life Style Community Sertifikasi Agen: Kompetensi, Integritas, Service Excellent

LAKUKAN MONITORING DAN EVALUASI HASIL

EXTERNAL ENVIRONMENT

Facts Procedures

Results

Perceptions C O M M U N I C A T I O N

•Success Stories •Weaknesses •Barriers for improvements •Opportunities for improvements

I M P R O V E M E N T S 32

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