The Effect of Over-Confidence on Jiwasraya's 2017-2020 Payment Defaults

Authors

  • Uly Artha Universitas Udayana, Indonesia
  • I Wayan Sukadana Universitas Udayana, Indonesia

DOI:

https://doi.org/10.57235/aurelia.v3i2.2469

Keywords:

Jiwasraya, Overconfidence, Share Prices, High Risk

Abstract

Overconfidence is a term that refers to the human tendency to estimate their abilities, knowledge, or results with more confidence than they should. PT. Jiwasraya Insurance (Persero), the oldest insurance company in Indonesia which is owned by BUMN, was declared to have failed to pay its customers' policies in 2020. This failure to pay was caused by errors in managing customer funds, namely by collecting funds for JS Products. Saving Plan and investing with customer funds in high risk stocks. The purpose of this research is to find out why Jiwasraya experienced payment failure. Therefore, the variable prices of high-risk shares purchased by companies from 2017 to 2020 is used as a secondary variable. Secondary data was obtained from the Indonesian Stock Exchange and the Financial Services Authority. This study uses. Vector Auto regressive (VAR) analysis technique with Stata/IC 15.0 software. The research results show that it is the Jiwasraya company's share price that influences Jiwasraya's shares in the short term. In the long term, it shows that the share price of Semen Baturaja does not have a significant effect on Jiwasraya's share price. Meanwhile, the share price of the West Java Development Bank has a significant negative effect on Jiwasraya's share price. Then, PP Properti's share price has a significant positive effect on Jiwasraya's share price. The results of this research can be used as consideration for companies and investors in making investment decisions so as not to take high-risk actions because of too high self-confidence.

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Published

2024-07-01

Issue

Vol. 3 No. 2 (2024): July 2024

Section

Articles

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