Tugu Reasuransi Indonesia (Tugure), one of the largest reinsurance companies in Southeast Asia, will partner with SAS, a leader in analytics and AI, to comply with the PSAK 74 standard for the local insurance industry. Tugure’s move comes in anticipation of PSAK 74 taking effect in January 2025.
Already in use by many insurance companies overseas, the SAS IFRS 17 solution supports users in a multitude of tasks such as data management (ETL), cash flow calculations, contractual service margins (CSM), journal entries, and disclosure reporting. This gives local insurers a thorough and robust alternative to customised solutions, generating savings in both financial and work-hour costs, while ensuring compliance agility to PSAK 74 well before it comes into force.
“From data orchestration and analytics, to risk and profitability reporting, insurers can protect their investments in actuarial, accounting and related solutions by integrating key IFRS 17 capabilities,” said Febrianto Siboro, Managing Director, SAS Institute Indonesia.
“SAS enables all of these to help organizations stay ahead of IFRS 17 requirements for compliance without losing visibility. No longer is there a need to spend more than necessary, or cause delays to PSAK 74 compliance, with a customised solution that is cost-effective and significantly reduces computational burden from new reporting guidelines,” he said.
Based on the International Financial Reporting Standard (IFRS) 17, PSAK 74 is intended to enhance transparency and comparability in financial reporting and is expected to lead to significant changes across the industry.
Significant changes under IFRS 17 and PSAK 74 include how insurance premium income will be now be considered obligations, instead of immediate profit. The resulting complexities and rigors in calculations and reporting will require local insurers to overhaul accounting standards and processes.
“Meeting the new reporting standard nearly three years in advance of its implementation will be a competitive edge for any insurance company that can achieve it. Having a smooth transition to PSAK 74 will enable us to serve our customers better and we are confident that SAS, with its long track record of delivering solutions to insurance companies worldwide, is the right partner for the transition,” said Finance Director of Tugure, Mr. Dradjat Irwansyah.
Established in 1987, PT. Tugu Reasuransi Indonesia (Tugure) is a reinsurance company that was initially intended to exclusively serve the insurance needs of Tugu Group. However, the vast growth of the insurance industry in Indonesia has prompted Tugure to review its condition as a unique opportunity to expand its scope of services to cover other insurance companies.
Tugure’s current business activities include providing services in reinsurance against risks faced by General Insurance Companies and Life Insurance Companies. Tugure has experienced rapid development as a corporation and gained the confidence of the national and international insurance industry.
Tugure is supported by strong asset values, amounting to IDR 5.22 trillion as of December 31, 2022. By implementing a more conservative technical reserve methodology, the level of the solvency ratio or Risk-Based Capital (RBC) of Tugure reached 221% at the end of 2022. This achievement is far above the minimum RBC threshold for reinsurance as set by the National Financial Services Authority (OJK), which is 120%.