Matt Crook
The Dili Weekly/Dili

With the majority of commercial organizations in Timor-Leste operating without insurance, an in-country insurance provider would not only provide a valuable service, but also a healthy injection of cash into the local economy, says Harry Goh, chief operating officer of new general insurance company National Insurance Timor-Leste, LDA (NITL).

“The thing that’s important about setting up an insurance company here in Timor-Leste is that we are helping the government conserve foreign exchange. If [non-governmental organizations] or multi-national companies are insured overseas, the money is going out of the country,” he said.

“We are keeping the money in the economy. On top of that, there will be service taxes applied to all insurance premiums so it becomes a form of revenue for the government,” he added.

NITL has four Singaporean shareholders and will offer policies covering everything from property and construction to motor insurance.

“There’s a very specific need for motor insurance, at least some kind of very basic cover for the country,” said Goh.

“The population of cars has been increasing rapidly throughout the country so there is some basic need to at least to cover the liability of the drivers or the vehicle owners when they do knock down passers-by or even injure their own passengers,” he added.

“When you have a car that knocks down a Timorese person, to go through the legal process may take some time, so we will offer some form of immediate benefit for the driver to compensate the person he has injured,” he said.

NITL’s target market will be businesses and non-profit organizations operating out of Timor-Leste. Part of the company’s long-term goal is to offer personal insurance policies that a significant portion of Timorese people would be able to afford.

“We recognize that the income levels of the locals are not sufficient to allow them to acquire insurance policies currently, so that will be in development as part of a long-term plan,” he said.

Goh, who has worked in the insurance industry in his native Singapore for 13 years, says that preliminary approval conditions for the company have been met, but final approval will only come once Banking and Payments Authority of Timor-Leste is satisfied NITL meets its administrative conditions.

The company should be up and running within two months.

There is a level of risk involved in setting up an insurance company in the fledgling nation, says Goh, adding that a 30-50-strong team of local staff will be employed by the end of the fifth year.

Goh says that this could see the development of Timor-Leste’s first generation of insurance professionals and the nurturing of the country’s young insurance industry.

Although Timor-Leste’s commercial organizations aren’t yet queuing up at NITL’s doors to get quotes on premiums, Goh is confident that, given time, his company’s services will be in demand.

“When an insurance company opens up, you don’t expect crowds of people saying they want insurance – that’s a fact all over the world – so we don’t expect it to be overwhelming at first,” said Goh.

“If losses are favourable, we hope to be able to drive premium costs down, but at this current stage we cannot say for certain because the unknowns far exceed the knowns in the country, so we will be playing it a bit safer for the first two years,” he said.

Goh added that at least 10% of NITL’s net profits will be used for corporate social responsibility objectives with a focus on widows, orphans and youth development. (*)