Indonesian insurance market is an untapped market where large part of population don’t have insurance and wants to have insurance policy due to increase in income to protect against risks of health and life. There are many foreign insurance companies that are entering into their market to serve a wide population.
Indonesia’s strong economic growth has influenced the insurance market to grow by providing the household the disposable income to spend on insurance products to protect their future.
Indonesia is 4th largest populous country in this world. Life Insurance possess a strong market demand and it is expected to grow much higher in coming years. Economic growth and increased income has given the opportunity to buy insurance products to protect the future. Life insurance is one of the major driver in Indonesia’s growth in insurance market.
Inter sector competition main in life inurance and health insurance is also growing due to the international insurance companies entering into the market. The social health insurance plays a significant role in the insurance industry. The Directorate of Insurance, Ministry of Finance has been acting as the regulatory body in Indonesia Insurance.
Indonesia doesn’t have a public health insurance plan that covers all its population , So there are private health insurance companies that cater health insurance requirements. Tourists need to have proper insurance as they are not covered under any public insurance in Indonesia.
Efforts need to be made in order to improve health care infrastructure as well as micro insurance policies that will protect the majority of population. Also there is need for more insurance agents who will cover more area and will improve the distribution network.
The reinsurance market segment is still at a primitive rate but growing at a significant rate which will help in insurance market growth by better collaboration with local and foreign insurance companies.
Indonesia has poor health care system and there is more disease and natural disasters that affect the insurance market adversely.
Indonesia being a major Muslim dominated country there is strong influence of Sharia Law that makes traditional Insurance useless.
There is a growing need to implement some of the market regulations so that a sustained market environment can be created.
The major life insurance companies in Indonesia are :
- Jasa Raharja
- Prudential Life Assurance
- AXA Mandiri Financial Services
- Commonwealth Life
- Indolife Pensiontama
The major health insurance companies are :
- Prudential, ManuLife