Insurance Begins to Expand on Fintech Guarantee Business

Insurance companies begin to expand their business on credit financing guarantee of financial technology (fintech) companies. One of them is PT Asuransi Asei Indonesia (Persero) who has been starting the cooperation.

Development Director of PT Asuransi Asei Indonesia M Syamsudin Cholid admitted it has been receiving many requests as a guarantor of the transaction of money lending service-based on technology or peer to peer (P2P) lending. Until middle of June, there is one fintech P2P lending company guaranteed by it.

"We already have a cooperation agreement and still on progress with one fintech lending company. The others still have to complete administrative requirements, " said Syamsudin. However, he did not mention in detail which companies have been cooperated with and how the guarantee scheme. In general, Asei is the guarantor of the risk of debtor’s default in paying off fintech’s credit.

"If the quesion is how the bussines works, that becomes the secret of the company. We are still developing and will sell it massively, "he said. In this case, Asei will guarantee the debtor’s credit up to Rp 25 billion per loan. Until the end of this year, he hoped Asei could become a guarantor company for three to five fintech companies.

As a new company which exploring on fintech guarantees business, Asei does not have ambiguous targets about how much credit will be guaranteed or the reward to be collected. "We do not have the targets yet, because this is just an additional income (job). Basically, this cooperation will provide a sense of comfort and protection for investors who want to invest into fintech company, "he explained.

According to the official website of Asuransi Asei Indonesia quote, it said that credit insurance provides protection or risk of the default insurance that distributed by financial institutions, such as banks and non-banks. In case of default of credit payment, Asei will provide compensation of 70% to 80% according to the amount of loss by non bank institutions, in this case fintech companies.

From the compensation payment, the debtor is required to pay the credit obligation to Asei. The value of the payment is adjusted to the credit plus the interest penalty that Asei has paid to the fintech company. Asei will get 100% compensation from the loss of fintech company.

Source: Kontan

Disclaimer: This article is a summary of news articles obtained from a number of mass media. We are not responsible for the accuracy of data or sources of information presented by the mass media that became the reference.

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