Institute of Risk Management and Insurance

The Indonesian Insurance Foundation (YAI) is an agency established by the Indonesian Insurance Board (DAI) to provide the necessary education, training and research as needed by the insurance industry. Since 2004 YAI has become part of the Insurance Council of Indonesia (DAI) ) with similar tasks. Over the last 30 or so years YAI has conducted various courses in insurance and management for a great number of persons employed in the insurance industry. In response to the needs of the work force that is “ready for use”, YAI established The Indonesian Insurance College (LPAI) in 1998. LPAI conducts a D-3 level education program for senior secondary education graduates. This program that has been implemented for three years provides more practical skills to the participants. So far LPAI has produced ca. 200 graduates; all of these have been absorbed by the insurance industry in Indonesia. Since the end of the nineteen-seventies, “Alternative Risk Transfer” (ART) products were created in response to price increases of traditional insurance products. Basically, ART is a hybrid of insurance products and capital market instruments. During the same period, there has been convergence of the banking and insurance sector, producing various kinds of Bancassurance . Meanwhile, Risk Management” has become a necessity for all types of industry, especially for the finance sector. BancAs, ART and insurance are important elements for the comprehensive risk management. This development has already stimulated many institutions of higher education abroad to thoroughly describe and formulate risk management as a science in its own right. To understand the progress outlined above, Indonesia needs to have an educational institution that focuses on risk management. In order to respond to the latest developments, this national institution needs to cooperate with like institutions of international caliber. To accomplish this, a Memorandum of Understanding between DAI, YAI, Ministry of Finance of the Republic of Indonesia and the South-East Consortium for International Development was signed on 3 September 2003. The undersigned to this MoU have agreed to cooperate and establish an Institute of Risk Management and Insurance (STIMRA) that is hoped to become the center for education, training and research in the risk management and insurance sector in Indonesia. On 31 October 2005, the Ministry of National Education issued a license on behalf of YAI to establish STIMRA which will conduct S1 and D3 level programs as well as courses in the risk management and insurance sector. STIMRA will commence its activities in 2006 with academic support of the University of Connecticut, USA, and funding from USAID and the Starr Foundation .