Indonesian Insurer Requests Cooperation Within Region.

The head of a leading Indonesian insurer has suggested that more regional cooperation, including political cooperation, is needed to help the insurance sector maximize its competitive advantages.

"Regional cooperation is another way to build competitive advantage, but to succeed, it needs a strong regionalistic platform," said B. Munir Sjamsoeddin, president director of Indonesia's biggest general insurer, PT. Tugu Pratama Indonesia.

He suggested raising the political dimension to help emerging-market insurers cope with the new, globally competitive environment. "More regional political cooperation" is essential, he said, adding that "the platform is there, but it's so weak."

This was a reference to the Association of South East Asian Nations Insurance Council, of which Sjamsoeddin is chairman, although he said his comments were his personal view. The council to date has been more of a communication forum, rather than a lobbying group or a trade association.

Whatever the political future, the economic precedent isn't good. Five countries set up ASEAN Reinsurance Co. in the late 1980s. It was dissolved after 10 years because business didn't materialize--in part because the ASEAN spirit wasn't strong enough to encourage trust from insurers, he said.

Takahiro Yasui, principal administrator of the Outreach Unit for Financial Sector Reform at the Organization for Economic Cooperation and Development, said it was "too expensive for society to lose the benefits of globalization." He suggested that the insurance sector practice financial prudence, especially with regard to investment; extensive staff training; and affiliation with international groups.