IAA Meetings May 24 28, 2006 Paris, France

1
Introduction toThe Society of Actuaries of
Indonesiaby Rianto A. Djojosugito
IAA MeetingsMay 24 - 28, 2006Paris, France
2

• Contents
• Where is Indonesia?
• How is the Local Economic Condition?
• The Society of Actuaries of Indonesia
• gtgt Organization
• gtgt Membership
• gtgt Role of Organization
• gtgt What do the Actuaries do?
• gtgt Where do the Actuaries work?
• gtgt What are Major Roles of the Actuaries?
• gtgt Challenges Ahead

3

• Where is Indonesia?
• Situated in Southeast Asia
• Archipelago with about 13 thousand islands
• Population size is about 230 million
• Of various ethnics (majority are Malay tribes),
  and of various religions (majority are moslems)
• Got its independence in 1945 (effectively in
  1950, from Netherland)
• Capital is Jakarta, situated in the island of
  Java
• Other cities and islands are for examples Banda
  Aceh and Medan (in Sumatra), Surabaya and Bandung
  (in Java), Denpasar (in Bali), Pontianak and
  Banjarmasin (in Borneo), Makassar and Menado (in
  Celebes), and Jayapura (in Papua)

4

• How is the Local Economic Environment?
• Banking industry and real sector are open to
  international players
• Capital Market, Insurance and Pension Fund
  industries are open to international players and
  supervised by the Ministry of Finance (of the
  Government)
• There are about 50 life insurance companies (with
  penetration to only about 5 of the population)
  and 150 general insurance companies in the local
  insurance market
• Actuaries work in life insurance companies
  (mostly), pension and employee benefit consulting
  companies (increasingly), reinsurance companies,
  the Ministry of Finance, and universities (on
  part-time basis)
• Demand for actuaries can be expected to increase
  in the future especially in the general insurance
  industry, pension and employee benefit consulting
  industry, and social security area

5

• The Society of Actuaries of Indonesia
• gtgt Organization
• Professional body for actuaries in Indonesia,
  founded in 1964
• Indonesian name is Persatuan Aktuaris Indonesia
• Full member of the International Actuarial
  Association (IAA), with education system
  improvement (underway) as condition
• Board members are elected through Member General
  Meeting for a three-year term of office (term of
  current Board is from 2005 to 2008)
• Current Board consists of President, Vice
  President (also serves as General Secretary),
  Treasurer, and six Working Commissions on areas
  of Code of Ethics, Standard of Practice,
  Curriculum and Examination, Continuing Education,
  Insurance, and Employee Benefits

6

• The Society of Actuaries of Indonesia
• gtgt Membership
• The Society of Actuaries of Indonesia has now 324
  members (134 Fellows and 190 Associates)
  compared to only 33 in 1990
• Its membership growth can be described as
  follows
• Year 1990 24 FSAIs, 9 ASAIs, 33
  members
• Year 1993 33 FSAIs, 16 ASAIs, 49
  members
• Year 1996 53 FSAIs, 28 ASAIs, 81
  members
• Year 2000 96 FSAIs, 133 ASAIs, 229
  members
• Year 2003 118 FSAIs, 183 ASAIs, 301
  members
• Year 2006 134 FSAIs, 190 ASAIs, 324
  members

7

• The Society of Actuaries of Indonesia
• gtgt Role of Organization
• Represents and regulates its members for the
  benefit of the profession and in the public
  interest
• Regulates standards of practice, and codes
  covering conduct, ethics and technical matters
• Runs own curriculum and examinations for new
  entrants
• Conduct seminars and workshops for member
  continuing education and professional development
• Create and maintain cooperative relationship with
  Government, business community, and other
  professions

8

• The Society of Actuaries of Indonesia
• gtgt What do the Actuaries do?
• Financial institutions life, health, and general
  insurances, pension funds
• Public programs, including long-term health
  services
• Deposit insurance and guarantee fund
• Financial reporting and other statutory
  requirements
• Prudential requirements
• Market conduct
• Regulation and supervision
• Public policy

9

• The Society of Actuaries of Indonesia
• gtgt Where do the Actuaries work?
• About 85 of practicing actuaries are
  concentrated in life (and health) insurance
  companies
• Remaining majority work mostly in pension and
  employee benefit consulting firms
• Around nine work for pension and insurance
  directorates of the Ministry of Finance (of the
  Government)
• Around ten work in the fields of reinsurance,
  general insurance and other financial sectors
  combined
• No full time actuary is on the staff of any
  university

10

• The Society of Actuaries of Indonesia
• gtgt What are Major Roles of the Actuaries?
• Major roles of pension (and employee benefit)
  actuaries are to perform statutory valuations,
  plan design, plan documentation, conversion and
  liquidation, training, and expense calculations
  for accounting purpose
• Demand for role of actuaries is growing, in
  particular on expense calculations for accounting
  valuation
• Major roles of life (and health) insurance
  actuaries are to monitor financial condition and
  solvency of companies and to advice to their
  boards, in particular
• Identify and monitor any risks run by the company
  which may impact companys ability to meet its
  liabilities to policyholders
• Design and price products, and sign and certify
  statutory liabilities

11

• The Society of Actuaries of Indonesia
• gtgt Challenges Ahead
• Creating better education system for new entrants
  and better continuing education and professional
  development system for existing members
• Meeting market demand
• More involvement in the traditional fields
• Competing with other professionals in non
  traditional fields
• Acquiring tools and methodologies to meet
  improvements in technology and social economic
  condition
• Maintaining highest quality of work and
  professional ethics
• Gaining recognition, internally and externally

12
Thank You