Evaluation of determining the coverage value of company assets using risk-based insurance approach (case study: Development project at PT Petrokimia Gresik)

Abstract

PT Petrokimia Gresik is a company working to address the increasing demand for agricultural land productivity by expanding the production capacity of NPK and urea fertilizers through several development initiatives. One of which is the Jetty C Project which has an investment value of IDR 300 billion as well as a loading and unloading capacity of 1.5 million tons per year, mainly gypsum and phosphoric acid products. Meanwhile, this company continues to provide and distribute products to support the National Food Security Program. Also, PT Petrokimia Gresik conducted an asset insurance process using the Industrial All Risk (IAR) approach to safeguard the long-term viability of the Jetty C Project. The coverage value of Jetty C is IDR 257.48 billion using this method, hence, the premium to be paid is IDR 357.90 million. Furthermore, the determination of the coverage value was evaluated using the Risk-Based Insurance (RBI) approach. The results showed that the coverage value was lower by Rp. 58.2 billion, thereby decreasing the premiums to Rp. 80.9 million. Therefore, it was concluded that PT Petrokimia Gresik saved Rp. 276 million by implementing the Risk-Based Insurance method.