GC: Can you tell me a little bit about your background, how you came to be working in-house, in the financial services industry and at Panin Dai-ichi Life in particular?
Randi Ikhlas Sardoni (RIS): I was born into a legal background family – my grandfather, father, uncles, aunts, cousins, brother, you name it. We hand over books from generation to generation. But that is in the private sector – surprisingly there has been no one working in-house – so I had to take the first step in the family. I only spent a couple of months in private practice, and then I took my career to work as in-house counsel at one of the biggest state-owned banks in Indonesia.
I found out that the insurance sector in Indonesia was growing and offering a lot of opportunities and challenges, and also that there was a scarcity of local talent. With the economy growing and many insurance companies entering the Indonesian market and competing for the same talent, there is a shortage in the market. Now I am at an insurance company, and have fallen in love with the sector.
GC: What are the main challenges of the Indonesian insurance market?
RIS: Indonesia is an emerging market and has high potential for the insurance sector. The main challenge currently is the market penetration. Insurance penetration in Indonesia is still around 2.9% compared to GDP. Singapore, Thailand and Malaysia have much higher penetration.
GC: Why is it so low?
RIS: I think one of the problems is financial literacy, particularly insurance literacy. There is scepticism about the insurance industry in Indonesia. The Indonesian financial authority, the OJK, has addressed this issue and it has required insurance companies to have a campaign for financial literacy, to increase market penetration.
GC: Can you talk a little bit about the regulatory environment in Indonesia?
RIS: The legal team will transform – we are no longer a braking system in the car, but we will become a navigation system. We are shifting our role from the defending player into the playmaker. We have to be able to provide strong legal advice and also excellent risk advice to the board and this ability will help the board to be the one sitting in the driving seat to direct the company. The legal team has to have strategies for providing sound legal input with strong business acumen, in anticipating changing regulations.
In ensuring the fair and supportive regulatory reform, government relations activities must also be addressed. General counsel must act as the advocate of the company by utilising the industry association bargain with the regulator.
GC: Are there any other main business challenges that the company is grappling with at the moment?
RIS: There is an untapped market in Indonesia. To become one of the top five or top three insurers in the Indonesian insurance business, we as a company have to produce a value proposition for prospective customers, cover for all the various social and economic channels, and develop the ability to penetrate the untapped market and create the system of brokerage. Indonesia has such a huge population, with only 2.9% market penetration. Currently many of the population are in a household of mainly generation X and Y. So that will be the focus of the company, and we are helping the company to be able to achieve those goals.
GC: What does your workload look like day to day? What occupies the majority of your time?
RIS: As the general counsel of the company, I am of course the subject legal matter expert. Currently, legal issues are still dominating the daily workload. However, standardisation of legal work and IT have helped users to have faster and more immediate attention from the legal department. So aside from the helping with the legal issues, we are currently in the process of designing a platform for stakeholders to have their wholesale legal needs met in one IT application, in one single window.
We are asking our stakeholders what is their expectation of the legal department, and then, in a couple of years, we will have that kind of application.
GC: What has been the highlight of your in-house career so far?
RIS: Probably experiencing a fast-track career compared to my peers in the market and the industry. Despite being part of the millennial generation, the board has entrusted me to serve them with the company secretary function and also with the counsel of the company. I think I certainly understand that this responsibility has to be managed properly, and also as currently we are in the spirit of the Asian Games, I am co-opting the energy of Asia tagline to the legal team – that youth spirit. My team are the problem-solvers, and we operate as a start-up legal team within the company.
GC: What does your legal team look like?
RIS: We currently have a lean, but highly effective legal department. Currently we have three lawyers – one who is responsible for corporate legal and secretarial, another responsible for government relations, and another for litigation respectively.
GC: What has been the most challenging moment of your legal career so far?
RIS: We are currently helping the company to embrace a new era, and we are also repositioning our place from legal advisory to business advisers. We are now really trying to create initiatives that translate that vision of legal and business advisers. We are trying to really listen to the business units and respond to them. We are now even thinking about having an internship programme into the business units, so that the legal team have experience in the business unit. After that, they will go back into the legal team with the proper knowledge – not only sitting at the desk doing the legal job, but really knowing what the business person is doing and experiencing for a certain period of time.
GC: What have been the major challenges or activities for you and your legal team over the past year?
RIS: One is always about digitalisation. Everyone is doing this, and we are now also expecting to be able to adapt and support the company in the digitalisation process. Technology has been a topic of conversation within the industry. We are in the age of the digital disruption, financial technology disruption, and now people are looking at insurance technology (instech). So that will also be something that we have to be able to adapt to, and also help the company to compete with that.
In terms of regulation, insurers have to be ready to spin off their Sharia units, as required by the 2014 insurance law. We have to submit the blueprint for the spinoffs by 2020, and they have to have spun off by 2024, so this is becoming a hot topic of conversation everywhere in the industry. We have to be able to ensure that the process of spin off is running smoothly and successfully.
Now, the issues relate to how to ensure that when the spinoff company is independent from the holding company or the conventional company, it will be competing with the other Sharia companies in Indonesia, and not with the conventional company.
There will be a lot of discussion about how to also train the financial advisers. Currently, we have financial advisers that hold two licences, a conventional licence and a Sharia licence. But after the regulation takes effect, they have to advise just the conventional or just the Sharia businesses. So these are will be several things that have to be taken care of and discussed properly.
GC: What else have you got coming up on the horizon over the next 12 months or so?
RIS: The next 12-24 months will also be about how to simplify the insurance process, to help society increase financial literacy, so people will be able to understand an insurance product properly. We all know that there is so much complicated language, so we have to able to simplify that language into more commonly understood language for society. I think that will also be the process over the next 24 months.