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This Southeast Asian Country is Promising Market for Insurtech

This Southeast Asian Country is Promising Market for Insurtech

Indonesia has shown significant economic growth since the global financial crisis in 2008. Its GDP per capita has grown to $3603 in 2016 from $857 in 2000. Compared to other ASEAN countries, Indonesia owns the highest share out of the total ASEAN GDP. Additionally, domestic consumption has also increased by 0,1% from the period of 2014-2016. This is caused by the increasing amount of Indonesia’s citizens entering the consuming class with around 5 million total population annually, earning more than $3600/year. A high population and base consumption level from Indonesia’s citizens makes Indonesia one of the best countries to invest in South-East Asia.

A study conducted by Google & Temasek, e-Conomy SEA 2018 states that digital industry in Indonesia is growing rapidly. Having the most active internet user in South-East Asia totalling to 150 million users in 2018, Indonesia is considered to be the country with the biggest internet economy (27 Billion in 2018) and also the fastest (49% Compounded Annual Growth Rate in 2015-2018) in South-East Asia.

Economic improvement should be able to support the growth of insurance in Indonesia. But according to the data shown by OJK in 2017, insurance literacy in Indonesia was actually declined 2% from 2013. Furthermore, the insurance utility level was decreasing too with overall penetration < 2%. This means only 4.5 million Indonesian out of 254 million hold an insurance policy.

Keterangan Gambar (© Pemilik Gambar)

To overcome this problem, OJK has publicly announced that digital insurance marketing in Indonesia doesn’t require any form of regulation. “It’s feared that the birth of insurance marketing regulations through digital channel will curb the penetration of insurance businesses,''said the Deputy Commissioner for Supervision of Non-bank Financial Industry, Moch. Ihsanuddin. The government together with financial institutions have agreed to encourage public inclusion in the financial services sector with a target of 75% by the end of 2019.

To date, life insurance is the most dominant insurance segment in Indonesia. Life insurance segment has shown strong gains from last years reaching IDR 167 Trillion in 2016, the highest peak in history. While non-life insurance mostly driven by property and vehicle insurance.

The insurance positive growth in Indonesia will continue until 2020 with projected CAGR reaching 13% for Life Insurance and 10% for P&C Insurance. This is considered on the increasing consumption level and exploding middle class growth and also the education provided by both private and public sector has been successful in raising awareness on the importance of insurance.

Source : Lifepal.co.id

Akhyari Hananto

I began my career in the banking industry in 1997, and stayed approx 6 years in it. This industry boost his knowledge about the economic condition in Indonesia, both macro and micro, and how to More understand it. My banking career continued in Yogyakarta when I joined in a program funded by the Asian Development Bank (ADB),as the coordinator for a program aimed to help improve the quality of learning and teaching process in private universities in Yogyakarta. When the earthquake stroke Yogyakarta, I chose to join an international NGO working in the area of ?disaster response and management, which allows me to help rebuild the city, as well as other disaster-stricken area in Indonesia. I went on to become the coordinator for emergency response in the Asia Pacific region. Then I was assigned for 1 year in Cambodia, as a country coordinator mostly to deliver developmental programs (water and sanitation, education, livelihood). In 2009, he continued his career as a protocol and HR officer at the U.S. Consulate General in Surabaya, and two years later I joined the Political and Economic Section until now, where i have to deal with extensive range of people and government officials, as well as private and government institution troughout eastern Indonesia. I am the founder and Editor-in-Chief in Good News From Indonesia (GNFI), a growing and influential social media movement, and was selected as one of The Most Influential Netizen 2011 by The Marketeers magazine. I also wrote a book on "Fundamentals of Disaster Management in 2007"?, "Good News From Indonesia : Beragam Prestasi Anak Bangsa di dunia"? which was luanched in August 2013, and "Indonesia Bersyukur"? which is launched in Sept 2013. In 2014, 3 books were released in which i was one of the writer; "Indonesia Pelangi Dunia"?, "Indonesia The Untold Stories"? and "Growing! Meretas Jalan Kejayaan" I give lectures to students in lectures nationwide, sharing on full range of issues, from economy, to diplomacy Less
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