Industries |

Covid-19 and The Indonesian Insurance and Banking Industry

Industries | 6 August 2020
Here are some issues as well as actions to consider as put together by PwC Indonesia.

The World Health Organization declared the COVID-19 virus outbreak to be a global pandemic on March 11, 2020, escalating from a declaration of a public health emergency on January 30, 2020. The virus has had unexpected human and economic consequences across many countries and has resulted in significant market and interest rate volatility. 

Along with its health impacts, the COVID-19 pandemic is rapidly disrupting business and consumer activity in affected areas and beyond. 

Here is our take on some additional issues that banks and insurance companies in Indonesia, in particular, might face. We also offer some thoughts on what you can do now to manage effectively through the uncertainty.

Banking Industry

Business Issues. Uncertainty in markets and credit spreads increase risks to access capital, operations and profitability; concerned customers and impact on demand/consumer behaviour; and possible increase of reputational risk. How can you respond appropriately and stay resilient in this uncharted territory?

Things to consider:

  • Product related and customer risk
  • Capital and macro-business factors
  • Other risk

Operations & Technology Issues. Staff and working practices; ability to work remotely and satisfy on-going data and operating requirements; untested recovery and continuity scenarios add to the pressure. How can you support your organization to keep the business running as smoothly as possible?

Things to consider:

  • Business continuity considerations
  • Distributed operations and employee matters

Accounting & Finance Issues. Credit losses, capital adequacy, liquidity, impaired assets, hedging breakage and financial instrument valuation issues and need for increased disclosures. What can you do to monitor, mitigate and report on the risks and uncertainties that lie ahead?

Things to consider

  • Finance and risk matters
  • Accounting considerations

Insurance Industry

Business Issues. Uncertainty in markets and credit spreads increase risks to access capital, operations and profitability; concerned customers and impact on demand/consumer behaviour; and possible increase of reputational risk. How can you respond appropriately and stay resilient in this uncharted territory?

Things to consider:

  • Product related and customer risks
  • Capital and macro-business factors
  • Other risks

Operations & Technology Issues. Staff and working practices; ability to work remotely and satisfy on-going data and operating requirements; untested recovery and continuity scenarios add to the pressure. How can you support your organization to keep the business running as smoothly as possible?

Things to consider:

  • Business continuity considerations• Distributed operations and employee matters

Accounting & Finance Issues. Insurance losses, capital adequacy, liquidity, impaired assets, hedging breakage and financial instrument valuation issues and need for increased disclosures. What can you do to monitor, mitigate and report on the risks and uncertainties that lie ahead?

Things to consider:

  • Finance and risk matters
  • Accounting considerations

Source: pwc.com/id