Peer-to-peer (P2P) lending platforms can be an opportunity for insurance companies to provide protection against credit risk.
insurance for funding channeled by peer-to-peer ( P2P ) lending platforms can be a new business opportunity for the insurance industry, although there are still a number of challenges in it.
Deputy Director of Financial Technology Regulation, Research and Development of the Financial Services Authority (OJK) Munawar Kasan said the P2P lending platform has an obligation to implement risk management in disbursing loans. This can be an opportunity for insurance companies to provide protection against credit risk.
"We ask, especially in the new POJK provisions that this platform must implement risk management. This will be related to the insurance business, insurance friends will definitely be happy," said Munawar in a webinar, Friday (27/5/2022).
He said, in providing insurance for P2P lending, what needs to be considered is that the P2P lending platform is not a lender so there is no credit risk.
While those who have credit risk are lenders or lenders. Therefore, those who have an insurable interest in the P2P lending are lenders .
Furthermore, Munarwan said that OJK did not require the use of insurance for lenders. The use of insurance is only an option depending on the lender's risk appetite . However, if the lender wants credit insurance protection, the P2P lending platform must facilitate it.
Thus, insurance companies can provide credit insurance with a credit insurance contract between the lender and the insurance company. Meanwhile, P2P lending platforms and insurance companies can enter into agreements to facilitate insurance for lenders. Regarding the terms of premium payment, subrogation, and other terms and conditions following the agreement and the applicable laws and regulations.
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"Insurance companies can enter into agreements to facilitate insurance for lenders because it is not possible, for example, people who fund Rp. 1 million continue to be insured. For insurance companies it is not attractive. If lenders come one by one it is difficult, this is the function of P2P to facilitate. For example, transactions on the platform can up to 1,000, which is then collaborated with insurance," explained Munarwan.
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