The ‘Alert 1 Manggarai Protection Card’, a microinsurance product which protects against flood, has been jointly launched by Indonesian insurance company Asuransi Wahana Tata (AWT) , German reinsurer Munich Re and the German government’s Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH. AWT is Munich Re’s local partner in Indonesia. A feasibility study has been conducted by Munich Re and GTZ and the product will now be available in 23 sub-districts in Jakarta. The product is literally a small card costingUSD 4.70 and guaranteeing a single payment of USD 23.90 . ‘Alert 1′ is the designation given to a flood if water rises to a minimum of 950 cm at Jakarta’ Manggarai Water Gate. The product was principally designed by Munich Re although most of the logistics, including marketing and sales, will be handled by AWT. Munich Re will act as the re-insurer of the product. GTZ conducted a great deal of background research, including household surveys in the 23 sub-districts and focus groups, and conducted a microinsurance awareness campaign consisting of training material and a brochure. The Promotion of Small Financial Institutions program, supported by GTZ in Indonesia, will be responsible for supporting the product in the field. AWT’s President Commissioner, Rudy Wanandi, comments, “With the right partners, a defined product and through our wide network within the region we are able to reach people and explain our innovative solutions. It will raise the insurance awareness of society and bring more economic stability and social security to people who live in exposed regions.” Currently, 3 percent of poor people have access to insurance products in the world’s 100 poorest countries.
GTZ has supported 50 socially responsible technical assistance projects around the world for its major client, the German government’s Federal Ministry for Economic Cooperation and Development (BMZ). GTZ was founded in 1975 as a company under private law and currently employs 12,000 people in 120 countries. About 9,200 employees are based outside of Germany Other clients include national governments, the European Commission, the United Nationsm the World Bank, and private enterprises. GTZ works on a public-benefit basis. The company’s surpluses are fed back into its sustainable development projects. In 2007, GTZ measured a business volume of USD 1.5 billion , an increase of 15.2 percent from the previous year. New contracts also amounted to USD 1.5 billion and contracts in hand, USD 3.55 billion. In 2004, GTZ became one of the 1,700 member companies of the Global Compact, a project founded in 1999 by UN Secretary General Kofi Annan to protect human rights and labor rights. Evaluation of sustainable development projects are conducted in accordance with the principles of the OECD Development Assistance Committee (OECD/DAC). The full range of consultancy services can be found here. GTZ has had a presence in Indonesia since 1975 and is currently working on a forest fire management project in south Sumatra as well as health, transport, and education initiatives for the Indonesia government. A list of projects in Indonesia is available here .
Munich Re has maintained microinsurance projects internationally that cover the death, disability, or severe illness of a family’s principal wageowner as well as optional property cover. Risks reinsured by Munich Re include natural catastrophes, major construction projects, third-party liability cases, personal injuries and others. Munich Re is the largest reinsurance company in the world as well as a primary insurance company, serving a total of 5,000 clients in 160 countries. The World Trade Center in New York had been reinsured by Munich Re. In a 2008 report , revenue was reported as USD 62.9 billion and operating income, USD 4.45 billion. Profit was USD 2.1 billion and total assets, USD 342.8 billion. 44,000 staff are employed by the company. In 2007 and 2008, Munich Re made USD 3.7 billion worth of investments in external growth opportunities. Equity stood at USD 29.3 billion and return on investments was 2.5 percent. Total international primary insurance premiums grew 12.5 percent although shareholders equity fell 21 percent. Gross premiums written totaled E 37.8 billion. In 2007, the return on equity was 15.3 percent. The Munich Re Foundation will be holding the 5th International Microinsurance Conference in November 2009. In a 2008 report, the foundation reported that 450 experts from 50 countries participated in the 4th conference. The report also discloses that a fog nets project to improve water supply in Eritrea was technically successful, but failed due to a difficult political situation. Other projects include an emergency radio network in Tonga, cyclone relief in Myanmar, and a flood-warning system in Mozambique.
AWT is ranked among Indonesia’s top ten general insurers in Indonesia, founded in 1964 and currently employing 800 and maintaining 30 domestic offices. in 2007, gross written premiums totaled USD 71.9 billion and total assets, USD 68.6 billion. Total investment was USD 32.5 billion and profit before tax, USD 4.4 billion. A list of products can be found here.
The World Bank estimates that approximately 49 percent of the Indonesian population is still living below USD 2 per day. In March 2009, 50 people were killed in a flood in a Jakarta suburb after four hours of downpour caused a dam to burst. A government official stated that the dam, built in the early 1900s, was poorly maintained. 40 people were killed when dams previously burst in 2007. The rainy season runs from December to March and the climate is greatly affected by the monsoon. Bogor, a city near Jakarta, witnesses 322 rainstorms per year. The regions of Western Sumatra, Java, and Bali as well as the interiors of Kalimantan, Sulawesi, and Irian Jaya experience over 2,000 millimeters of rainfall per year.
Additional Resources:
“Innovative Non-Life Microinsurance launched in Indonesia”, Published by Symbiotics, May 2009
AWT: Home
GTZ: Home
Munich Re: Home
Munich Re Foundation: 2008 Report
Munich Re: 2008 Financial Report
Climate of Indonesia
“50 dead in Indonesia flood”, Published by AP, March 2009
By Goda Thangada, Research Assistant
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