Thursday, December 14, 2017

Indonesia to ease investment rules for insurance funds

Insurance funds will soon find it easier to invest in riskier products in Indonesia as the country’s Financial Services Authority has announced that it will try to ease bond investment rules. Under the proposed changes, insurance or pension funds in Indonesia will soon be allowed to invest in bonds with lower ratings instead of being limited to bonds with certain ratings. According to Nurhaida, the regulator’s capital market supervisor, there are bonds in Indonesia that have lower ratings but are actually quite safe. Easing the investment rules will boost the local bond market, she said. Meanwhile, Indonesia’s Islamic insurance industry expanded 34% to a record MYR22tr (USD1.7bn) in 2014, faster than the 9% growth recorded in Malaysia. The global Islamic finance industry is expected to expand to USD20bn by 2017.

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