The insurance industry in Indonesia has been witnessing rapid growth. However, public trust in this industry is currently on the decline. To restore this trust and make the insurance industry stronger, the Financial Services Authority (OJK) has launched a roadmap for the development and strengthening of Indonesia’s insurance industry, covering the period from 2023 to 2027.
As it is commonly known, insurance is no longer merely an option but a necessity. Its presence is crucial in protecting both businesses and the public from unpredictable risks such as natural disasters, fires, and similar threats. In an era of rapid economic growth, the insurance business must become more robust and innovative to accommodate evolving needs.
The strengthening of the insurance sector encompasses various aspects, including advanced risk management, a deeper understanding of insurance policies, and the development of insurance products that better suit market needs. Through these efforts, the insurance industry in Indonesia will be able to provide enhanced protection for both companies and the general public.
In light of the ever-changing environment, investing in insurance strengthening is a wise step. This not only safeguards the insurance business itself but also provides significant benefits to individuals who rely on insurance protection in times of uncertainty. With a proactive approach to insurance strengthening, the insurance industry in Indonesia can remain relevant and contribute to sustainable economic growth.
Recognizing the importance of focusing on insurance strengthening, the OJK has designed a roadmap for this sector. This strengthening is also expected to restore public trust in insurance.
The Insurance Strengthening Roadmap by OJK
The roadmap introduced by OJK is more than just a concept. It represents a strong commitment from regulators and insurance associations. OJK has issued the Development and Strengthening Roadmap for the Insurance Industry for the 2023-2027 period at the Shangri-La Hotel on Monday (23/10/2023). All stakeholders, including associations and their members, as well as supporting ecosystems, are actively participating in efforts to rebuild public trust in the insurance industry.
OJK’s Executive Director of Insurance Supervision, Guarantees, and Pension Funds, Ogi Prastomiyono, stated that this roadmap is a strong commitment not only from OJK but from all stakeholders, associations, and their members, as well as the supporting ecosystem. His remarks were made during a press conference on Monday (23/10) and were quoted from cnnindonesia.
The roadmap for the development and strengthening of Indonesia’s insurance industry from 2023 to 2027 is divided into three distinct phases. In the first phase, covering 2023 to 2024, the emphasis is on strengthening the foundations to address issues faced by troubled insurance companies. This needs immediate attention to prevent hindering the implementation of industry development and strengthening.
The second phase, spanning from 2025 to 2026, focuses on utilizing the enhanced resources to strengthen the insurance industry’s growth more effectively.
In the third phase, in 2027, OJK will work towards developing an ecosystem that supports the insurance industry and creates new opportunities. To monitor the implementation of this roadmap, OJK will establish a task force that will conduct reviews every six months. High commitment will ensure that the insurance industry becomes more robust, healthy, and sustainable.
Boosting Insurance Market Penetration
Indonesia’s Gross Domestic Product (GDP) still has significant potential to increase insurance market penetration. Currently, this penetration is only at 2.75%, equivalent to approximately 7.5 million people out of the total population of 275 million in Indonesia. While this figure may seem low, it is actually a substantial opportunity.
When considering Indonesia’s demographics, where a young population will dominate by 2045, there is great hope that insurance penetration can increase. This young population has the potential to drive increased insurance penetration, presenting a positive challenge that can deliver significant benefits to the entire insurance industry in Indonesia.
Overall, the steps taken by OJK to strengthen insurance are a wise move to keep the industry relevant and contribute to sustainable economic growth.
20% off today. Whatsapp us!