Generali Indonesia has invested considerable time over the years in getting to know their local regulator, building trust and goodwill through transparent working and providing benefits and services that work in a coordinated way with state benefits.
Yuliana Tjong, Partnership Distribution Group Head, Generali Indonesia, explains: “Consequently, when faced with new regulations in Indonesia that questioned GEB’s business model, the regulator was amenable to meeting with representatives from Generali Indonesia and GEB central office to discuss the issues. Not only that, but they subsequently issued an exception to the regulation for those group health & life products offered by Generali Indonesia that are marketed globally (worldwide) and designed specifically for multinational companies.
Previously regulators questioned GEB’s business model of reinsuring quota share for captive and pooling business both abroad and through their own parent company. This was seen by the regulator as a transfer of profit and therefore a way of avoiding local taxes.
However, considering most of the profits are transferred back to the client in terms of captive retrocession or the pooling dividend, the client would be negatively impacted if the regulator insisted on a change to this model.
Vittorio Zaniboni, Chief Insurance Officer, GEB, says: “We worked with local colleagues in Indonesia to address the regulator’s concerns, helping them better understand our market and make it clear that we’re not in the business of tax avoidance.”
“We achieved this by communicating to the regulator the advantages of our business model to Indonesian business, employees and economy.”
In terms of employees, GEB’s business model allows for improved benefits. Because all the margins on top of claims are often invested back into the company, the employer can be more generous. Plus, as Generali Indonesia has a global company behind it, the employees of our clients are afforded more advanced underwriting terms than would normally be available locally.
What’s more, as part of a global Network, Generali Indonesia has access to the kind of best practice that can help optimise processes for the employer too.
Finally, Vittorio explains that in the event that GEB’s business model could not operate, multinational corporations that wanted to open a subsidiary in Indonesia would no longer be able to benefit from optimising all their employee benefit schemes. “Therefore, amending the draft regulation to allow our model to work, brings benefits for the economy in general too,” he adds.