Manulife Indonesia to spin off sharia business unit, increase market share

Manulife Indonesia has submitted a proposal to the Financial Services Authority (OJK) to generate a bigger market share for its holding company by creating a spin-off of its sharia business unit, a company executive has said.

“We have submitted the documents for the spin-off to the OJK,” Manulife Indonesia’s sharia unit head Yetty Rochyatini said in Jakarta.

She said the Canada-based company was waiting for the OJK to complete a new regulation on sharia mutual funds, which would be released this year.

Manulife’s sharia business unit recorded 31 percent growth year-on-year in its risk-based capital to 125 percent in the first quarter of 2016. The government has stipulated that all sharia insurance companies must have a minimum risk-based capital of 30 percent.

Yetty said the company’s qard (benevolent sharia loan) funds amounted to Rp 240 billion (US$18.2 million), enough to meet the solvency level needed.

According to the company’s unaudited financial report, the sharia business unit recorded Rp 25.2 billion of gross premium income in the first quarter of this year, an 84 percent increase year-on-year.

“While waiting for the OJK to formulate the regulation, we continue to prepare ourselves by enlarging the business size and boosting sales,” Yetty said.