Futuready and Business Prospects of Online Insurance Brokers in Indonesia

Speaking of financial services (LJK) in Indonesia, one of the main elements that must be obeyed is the law. The reason is, LJK is different from other industries because there are transactions from customer funds, so clarity on business licenses is the main key to opening an LJK business. Rules are made because the end goal boils down to consumer protection from action moral hazard.

With that in mind, Futuready was founded. Futuready is a brokerage firm (better known broker) insurance, with dedicated online sales channels. This company is claimed to have an official license from the Financial Services Authority (OJK) with the business name PT Futuready Insurance Broker and license number no. KEP-518/NB.1/2015.

Futuready's business license has been out since 2015, but the site has only been available since the middle of last year. Futuready shares are owned by Aegon Group as much as 80% and the remaining 20% ​​is owned by a local company with an undisclosed identity.

Aegon Group is a life insurance company headquartered in The Hague, Netherlands. Aegon chose to enter Indonesia as a company broker, not licensed insurance company. The reason is simple because insurance players in Indonesia are already too crowded, so that prospect Insurance brokers are considered brighter and more promising.

"When we talk about Futuready, we understand that this will be of great benefit to the people of Indonesia, but it must be in a clear legal context. If we believe the goal is noble, then the method must be noble [to have a license]," said Futuready CEO and President Director Sendy Filemon to DailySocial.

Obtaining a license to offer financial service products, according to Sendy, is obligatory because financial services are different from offering fashion products, electronics, or travel tickets. The transaction just starts when the money changes hands, for example in insurance, the transaction will only be completed when the insurance period ends.

There are only three sources of funds from financial services companies, namely from capital, business profits, and customer money. Potential occurrence moral hazard even bigger.

"Because there is money in deposit, there is a risk that the person holding the funds can run away. This can happen moral hazard, if there is negative feedback from consumers because of this, the industry can be damaged. That's why it needs an official business license in accordance with regulations, in this case the OJK issues a permit and is in charge of supervising the company after the permit is granted."

Based on POJK, the provisions for establishing a company broker is to prepare a minimum paid-up capital of IDR 3 billion. Must be deposited in cash and in full in the form of time deposits and/or checking accounts in the name of the company at one of the commercial banks in Indonesia.

The cost of distributing financial services products is very expensive

Sendy said that when his party thought about establishing Futuready, they wanted to solve the problem of distribution points for financial services products which were relatively expensive and exclusive. Currently, the marketing pattern for financial service products is mostly done manually captive, no shared.

This is what makes the price of insurance products, in particular, so expensive. Because, in the end, it is the people who have to pay for the high cost, because the agent's commission is charged to the consumer because this fee is included in the product price. Not to mention, by the way captive, making financial service products feel exclusive because the service standards and documents used are provided with Jakarta standards.

In fact, in the regions, private or national banks must compete with Regional Development Banks (BPD). Where, they use standard documents that are in accordance with the conditions in the area.

"Have you ever seen credit products from Bank A being sold at Bank B? No, right? It's different from FMCG products, such as Aqua and Unilever. Do they use special channels to sell their products? shared, such as in supermarkets or minimarkets. Because of the pattern captiveThat's why the price of insurance products is so expensive."

He wants to solve the problem with the help of technology, so his position is that fintech becomes a bridge to streamline the price of insurance products because there are costs that are cut.

Moreover, working concept broker is to put the interests of the customer first. Sendy guarantees that this will be a selling point that customers cannot get when they buy insurance through agents or online. Broker can also be mandated by the customer to make a claim.

Just so you know, by regulation the agent's job is to work for the company and is not mandated to help customers when making claims. This added value, according to Sendy, cannot be found by customers when buying insurance. Although, neither the agent nor the broker, both get a commission from premium payments from customers.

Futuready Target

This year, Futuready plans to add eight new insurance product categories by adding insurance company partners. Meanwhile, the target customer is targeted to reach 72 thousand people, up from the current position which is still below 10 thousand people.

Meanwhile, Futuready has four types of insurance product categories, namely health insurance, travel insurance, accident insurance, and car insurance. Although the product category has not yet been determined, there are several potentials that can be included in the Futuready portfolio, including electronic goods insurance, term insurance (term life), property and lifestyle.

Sendy is sure that his party will achieve this target. The reason is, throughout this year the parent company plans to inject fresh funds several times. The funds will be used, one of which is to recruit new workers for the technology and IT development department. In the last year, Futuready received two injections of funds with an undisclosed amount.

About business prospects broker, according to Sendy, will be brighter. Armed with a license already held by Futuready, his party is confident that they can work on the insurance product sector that has not been touched by marketing agents by selling products with an annual premium of around Rp. 500 thousand to Rp. 5 million.

This segment is considered empty and the sellers are limited. For example, travel insurance is mostly sold by travel agents or car insurance is sold by car dealers.

"The point is that Futuready only sells simple insurance products, you don't need to meet up face to face. If consumers like it, please buy it, the process full online, both for registration and claims. The whole process is done comply with regulations and supervised by OJK. We are obliged to report our finances regularly to the authorities."