Munich Personal RePEc Archive

Foreign Ownership of Insurance Companies: Indonesian Case 2012-2015

Ngasuko, Tri Achya (2017): Foreign Ownership of Insurance Companies: Indonesian Case 2012-2015. Published in: Penguatan Fundamental Sektor Keuangan , Vol. 1, (1 June 2017): pp. 251-272.

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Abstract

This paper analyzes the relationship between the level of foreign ownership and performance of insurance companies in Indonesia. We use a panel dataset of 24 insurance companies in Indonesia over the period 2012 to 2015. We find that domestic insurance companies have better performance than foreign investment recipient. It is clear that local insurance companies can compete with foreign firms. We also find that there is no significant evidence of nonlinearities between the level of foreign ownership and insurance performance in Indonesia. This comes up a result that there is no particular optimal level of foreign ownership of the life insurance sector in Indonesia. The data also suggest that the performance of insurance companies with foreign investment is not significantly better or significantly worse than domestic insurance companies.

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