klinikfarma.com Insurance ownership in Indonesia is still low, reaching only 2.75% or around 7.5 million of the total population. This figure is far below neighboring countries such as Malaysia, Thailand, and Singapore. Why is insurance ownership in Indonesia still low? FUSE Founder & CEO, Andy Yeung, provides an explanation and solutions to increase this figure.
Indonesia’s Insurance Ownership Rate Is Still Low: What’s the Cause?
Low Literacy and Comprehension
One of the causes of low insurance ownership is the low literacy rate in society. Many people do not understand the protection function of insurance. To overcome this, further efforts are needed to increase public understanding of the importance of having insurance as a form of financial protection.
High and Unaffordable Premiums
The price factor is also a major obstacle. The premium price of insurance products is often considered expensive and less affordable for most people. Andy Yeung emphasized the need to make insurance premiums more affordable so that more people can access insurance protection.
Challenges of Effective Insurance Distribution
The lack of insurance distribution media is another obstacle. Efforts are needed to create an effective insurance distribution system that is able to reach the community to the smallest level. This is the first step in increasing insurance penetration in Indonesia.
The Role of Technology in Increasing Efficiency
Andy Yeung highlighted the role of technology as a solution. By utilizing technology, insurance companies can improve operational efficiency. This includes introducing insurance at more affordable prices and increasing the reach of insurance to the community, even in the outermost layers.
Product Distribution at Affordable Cost
Product distribution costs are also an important consideration. According to Andy, now is the right time to use technology to introduce insurance with more affordable distribution costs.
