CIMB Niaga Inks Ship Insurance Deal With AON
Grace Dwitiya Amianti
Bank CIMB Niaga signed a ship insurance deal with insurance brokerage AON Indonesia on Friday as part of the lender’s effort to double its ship financing to Rp 5 trillion ($545 million) annually within three years.
Under the deal, AON Indonesia will work with five insurance companies CIMB Niaga has partnered with, streamlining the ship insurance process for ship purchases that use CIMB Niaga financing.
CIMB Niaga, Indonesia fifth-largest lender by assets, channeled Rp 2.5 trillion to ship financing last year, up from Rp 1.9 trillion the previous year. Most of the financing relates to purchases in Jakarta, Batam and East Kalimantan.
“Within three years, the value could be increased to Rp 5 trillion,” said Tito Sudiarto, CIMB Niaga’s vice president for lending products.
Handoyo Soebali, director of commercial and Shariah banking at CIMB Niaga, said the lender currently worked with five ship insurance providers: Asuransi Sinar Mas, Asuransi Jasa Indonesia (Jasindo), Asuransi Central Asia, Asuransi Wahana Tata and Asuransi Jaya Proteksi (Japro).
Handoyo said the bank would need AON Indonesia’s expertise in ship insurance to standardize and streamline the insurance process for all ship financing from CIMB.
“Ship insurance is complicated and requires a high degree of precision,” Handoyo said. “We need a company that has expertise in ship financing insurance, such as AON.”
Handoyo said ship financing in Indonesia had substantial growth potential, with the country needing more ships to comply with a cabotage law in place since last May.
The cabotage law, which was enacted in 2005 only to see years of enforcement delays, requires vessels operating in Indonesian waters to register as Indonesian-flagged vessels, with exceptions for vessels that are involved in the oil and gas industry.
Shares in CIMB Niaga rose 0.8 percent to Rp 1,230 on Friday.