Jakarta-based risk professionals highlight both lasting and looming challenges at StrategicRISK’s Indonesia Risk & Insurance Management roundtable

Some of Indonesia’s top risk managers met with the StrategicRISK team, local brokers and Zurich’s regional representatives yesterday to examine the country’s major risks and opportunities.

Held at the Hotel Indonesia Kempinski, Jakarta, the roundtable event provided a forum for a discussion that navigated the complex waters of Indonesia’s fast-flowing rivers of risk.

When asked to nominate the primary risks faced by organisations operating in Indonesia, most participants raised issues relating to human capital. Education and training, skills shortages and retention of talent all featured heavily in the discussion. Other big risks were political uncertainty, supply-chain disruption and, in line with world trends, regulatory change and challenging economic conditions.

Uncertainty surrounding the implications of next year’s presidential election combined with the global slowdown had affected risk outlooks in Indonesia, many said. It was clear that participants felt that, despite the huge opportunities on offer in the country, major investment was likely to remain on hold until after the election.

All agreed that the lack of a strong risk-management culture outside of the financial sector was of great concern. Indonesia’s financial sector was also seen as leading the way in dealing with cyber risk, while firms in other fields rarely seemed to have any kind of cyber policies.

Risk management was usually regarded as more of a cost centre than a profit centre at board level, it was suggested. This, combined with the fact that most organisations based in Indonesia viewed insurance merely as a commodity and that the country had one of lowest insurance penetration rates in the world, means there is a long way to go in this area.

Future risks also centred on people, with increasing labour costs and continuing low skills levels causing difficulties for companies eager to grow in Indonesia. Land availability, flooding and windstorms, and the challenge of dealing with increasingly sophisticated risks related to nanotechnology, biotechnology and the like were also discussed.

There was a great deal more considered at the roundtable, and along with the further discussions and interviews, this intelligence will form the basis of StrategicRISK’s upcoming Indonesia Risk Report. This, in turn, will join SR’s series of country-focused risk reports, which culminates in a pan-Asia risk sentiment study being published soon.