State-Owned Insurance Holding: The Establishment Impact on The Efficiency and Profit Optimization of State-Owned Insurance Companies

Abstract

The Indonesian government has established PT Bahana Pembinaan Usaha Indonesia (Persero) as the holding company of several state-owned insurance companies, which aims to support the strength of subsidiaries in fulfilling obligations and increasing efficiency in their governance. The establishment of a holding through government regulation Number 20 of 2020 creates a single governance system so it is hoped that there will be no overlap, especially in risk management. This study aims to analyze and examine the level of efficiency and performance determinants of state-owned insurance companies before and after the implementation of the holding formation. This study uses a quantitative approach using Data Envelope Analysis (DEA) analysis and panel data regression for 2018-2022 consisting of 5 state-owned insurance companies. Based on the results of the study, the efficiency values of Asuransi Jamkrindo, Jasa Raharja Putra, and Asuransi Jasa Indonesia are in the high-efficiency criteria (100%) and the determinants of insurance company performance are influenced by the variables of underwriting results, investment results, operating expenses, gross reinsurance premiums, and other income. The consistency of the efficiency level before and after the issuance of PP No. 20 of 2020 implies that governance factors (ownership) have an influence on the stability of insurance company efficiency through maximizing income, especially underwriting results. In addition, the stability of efficiency in insurance companies will also increase the company's trust in the real sector through the ability of insurance companies to handle the risks covered.

Keywords: State-owned Insurance, Holding Company, Efficiency, Profitability