Liga Asuransi – In this modern era, driving safety is increasingly becoming a major concern, not only for drivers but also for third parties who may be affected by an incident on the road. Third Party Liability Insurance (TPL) is an important instrument for creating a sense of security and responsibility among road users. In Indonesia, the implementation of mandatory TPL insurance not only provides financial protection to victims, but also contributes to increasing collective awareness of the importance of safety and legal compliance in traffic. This article will discuss the urgency of implementing mandatory TPL insurance in Indonesia and review seven recent news stories from the insurance industry that are relevant to this development.
Increasing Tourists, Big Opportunities for the Travel Insurance Industry
The insurance industry in Indonesia is looking at big opportunities in the travel insurance sector in line with the surge in the number of tourists coming and traveling, especially ahead of the year-end holidays. In September 2024, the number of foreign tourists visiting Indonesia was recorded at 10.37 million, a significant increase of 20.28% compared to the same period the previous year. This positive trend is expected to continue until the end of 2024, opening up promising market opportunities for travel insurance.
Great Opportunities from Tourist Movement
Risk Management Practitioner and General Chair of the Indonesian Insurance Writers’ Community (Kupasi), Wahyudin Rahman, believes that the increasing volume of travel, both domestic and international, has made travel insurance an increasingly large market. In the period January to July 2024, 598.7 million trips were recorded in Indonesia, a figure that shows significant market potential for the insurance industry. “The increase in the number of tourists provides an opportunity for the insurance industry to expand its customer base,” said Wahyudin.
Increasing Travel Insurance Literacy
Apart from being a market opportunity, this moment of increasing travel is also an opportunity for the insurance industry to increase public literacy about the benefits of travel insurance. Wahyudin highlighted the importance of a broader understanding of travel insurance products, such as emergency health protection, trip cancellation and delay, as well as protection for personal items. “Moreover, travel insurance has become mandatory for tourists traveling abroad,” he added.
End of Year Holidays: A Great Time for Special Offers
With the year-end holidays approaching, Wahyudin is confident that the travel insurance industry will experience a surge in demand. “In terms of trends, the fourth quarter is always the right time to increase travel insurance premiums. “At this time, insurance companies often record an increase in demand, both from domestic and international tourists,” explained Wahyudin.
For insurance companies, this is an opportunity to offer products that are relevant and attractive to consumers, such as special packages or special promotions that increase interest in travel insurance. This could create an opportunity for consumers to be more aware of the protection they can obtain while travelling.
Challenges in Implementing Travel Insurance
Even though the market potential is very large, Wahyudin also said that the main challenge faced by the travel insurance industry is low literacy. Many tourists do not understand the benefits of travel insurance in depth, except for those required by travel agents. “More intensive outreach from all stakeholders in the tourism ecosystem, insurance industry and regulators is very important,” he stressed.
Apart from that, increasing ease of claims, product transparency and better accessibility, especially on digital channels, also need to be considered so that consumers feel more comfortable and confident in using travel insurance.
Overall, the momentum of the year-end holidays provides a great opportunity for the travel insurance industry to grow and expand market reach. With the increase in tourists, travel insurance is becoming an increasingly relevant solution. However, this success also depends on industry efforts to increase insurance literacy, ease of access and product transparency. On the other hand, with attractive offers and proper outreach, consumers will become increasingly aware of the importance of protection during travel, making travel insurance more than just an obligation, but an inseparable necessity in their travels.
The Long Story of AJB Bumiputera, From Glorious History to Failing to Pay the Police
AJB Bumiputera in the Middle of the Crisis Failure to Pay
The case of failure to pay the 1912 Bumiputera Joint Life Insurance (AJB) policy has emerged again. On November 11, 2024, 44 policyholders sued the company at the South Jakarta District Court with a lawsuit amounting to IDR 679 million. The initial trial is scheduled to take place on November 18, 2024.
Previously, in March 2024, a similar lawsuit was also filed by 272 policy holders through a class action lawsuit at the Ngawi District Court. This lawsuit was led by the Regent of Ngawi, Ony Anwar Harsono, with total unpaid claims reaching IDR 6.48 billion.
History of Bumiputera
AJB Bumiputera 1912 has a long history as a pioneer of mutual-based insurance in Indonesia. Founded on February 12 1912 in Magelang, this company was originally named Mutual Life Insurance Company Persatoean Guru-Guru Hindia Belanda and was founded by three teachers: Mas Ngabehi Dwidjosewojo, Mas Karto Hadi Karto Soebroto, and Mas Adimidjojo.
Bumiputera was founded without initial capital, only with premiums paid by members according to the product chosen. The philosophy of togetherness and mutual cooperation became the main foundation of the company until its name was changed to AJB Bumiputera in 1966.
Crisis and Default
Financial problems began to emerge in 2010 due to failed investments, which caused the company’s debt to swell to IDR 22.77 trillion, while its assets were only IDR 12.1 trillion. This situation has an impact on the number of customer claims that have not been paid.
Bumiputera’s President Director, Irvandi Gustari, admitted that the company did not comply with financial health requirements in accordance with OJK Regulation Number 1/POJK.05/2018. To overcome this, in 2023, management prepared a Financial Restructuring Plan which was approved by the OJK. The strategies implemented include asset disposal, optimizing guarantee funds and operational restructuring.
Hope for Recovery
At the Extraordinary Session of the Member Representative Body (BPA) in May 2022, it was agreed that Bumiputera would continue as a joint venture. According to the Articles of Association, losses will be shared pro-rata among members.
“This decision was taken to save the rights of policy holders while maintaining the sustainability of Bumiputera,” said BPA spokesperson, R.M. Good job Irawan.
Even though it is full of challenges, there is still hope for Bumiputera to rise and return to being a trusted symbol of mutual-based insurance in Indonesia.
Zurich Syariah Launches Parametric Insurance for Coffee and Cocoa Farmers: Attracting the Interest of Generation Z
PT Zurich General Takaful Indonesia (Zurich Syariah) is currently focusing on developing parametric insurance products specifically designed to help coffee and cocoa farmers in Indonesia. This innovative product is not only to protect farmers, but also to attract the attention of the younger generation, especially Gen Z, who are increasingly interested in sharia insurance products.
Presenting Solutions for Farmers and the Young Generation
President Director of Zurich Syariah, Hilman Simanjuntak, explained that this parametric insurance product is designed to meet the needs of farmers who are vulnerable to the risk of extreme weather changes, such as crop failure. “Products like this are very suitable to attract the interest of the younger generation, especially Gen Z, who care more about social goals and positive impacts on society,” said Hilman in a limited discussion in Jakarta on November 12 2024.
For the younger generation, especially Gen Z, products that offer financial benefits and also have a positive impact on society, especially those who are underserved, are attractive. “This product helps people who are far from reach, especially farmers who live in remote or lower middle class areas. This is in line with the values appreciated by the younger generation,” he added.
Parametric Insurance: Innovation for Farmer Protection
The parametric insurance launched by Zurich Syariah in 2022 uses the weather index as a parameter to calculate claims. With this approach, this insurance protects coffee and cocoa farmers from the risk of crop failure due to extreme weather changes such as drought or erratic rainfall.
This program started in Aceh, especially in the Benar Meriah area, involving 1,500 coffee farmers. In 2023, Zurich Syariah expands its coverage to Tanggamus, Lampung, and Kolaka, Southeast Sulawesi, by involving cocoa farmers. By the end of 2023, the number of protected farmers will increase to around 4,600 people, with 30 percent of them being cocoa farmers, while the rest are coffee farmers.
Expansion Targets and Long Term Impact
Zurich Syariah targets to expand the number of protected farmers to 9,000 people by the end of 2024. Although the contribution of parametric insurance products to the company’s portfolio is still small, Hilman believes that this product has significant growth potential in the long term, especially in creating financial inclusion for people in need. insurance protection.
“This product is not just about financial protection, it is also about supporting farmers, especially those who need it most. “With a more innovative and relevant approach, we hope to increase literacy and awareness of the importance of insurance among the younger generation,” concluded Hilman.
Through this program, Zurich Syariah not only focuses on business growth, but is also committed to increasing the sustainability of the agricultural sector in Indonesia and supporting underserved communities with more easily accessible insurance protection.
Digital Transformation: The Key to the Growth of the Insurance Industry in Indonesia until 2027
Improving Digital Distribution for the Future of Insurance
Digital transformation is now one of the main focuses to achieve the growth target for the Indonesian insurance industry until 2027, in accordance with the roadmap prepared by the Financial Services Authority (OJK). In this development plan, OJK targets the contribution of digital distribution channels or e-commerce to total insurance premium income to reach 45%, while the agency contribution will be reduced to only 1% from what is currently one of the main contributors.
Specifically for the life insurance industry, based on data from the Indonesian Life Insurance Association (AAJI) until the first semester of 2024, the agency channel still dominates with premium income of IDR 27.94 trillion, which recorded an increase of 3.4% year on year (YoY). However, the new e-commerce channel contributed IDR 81.9 billion or less than 0.1% of the total premium income which reached IDR 88.49 trillion.
Digitalization Becomes Challenges and Opportunities
According to AAJI’s Head of Product, Risk Management and GCG, Fauzi Arfan, to increase revenue contribution from digital channels, the insurance industry still has a long way to go. Fauzi added that digitalization has only begun to be widely implemented in the life insurance industry in the last five to six years, and one of the biggest driving factors is changes in policyholder behavior after the COVID-19 pandemic.
Fauzi also revealed that although digitalization has great potential, there are still many challenges that need to be faced, such as the investment required and the readiness of the insurance companies themselves. Digital transformation is now considered an inevitable step so that insurance companies can continue to compete, both in national and global markets.
Technological Innovation for Ease of Service
One form of digital adaptation that is increasingly being used in the life insurance industry is the increasingly sophisticated use of chatbots. This chatbot is not only able to provide more accurate answers to questions from policyholders, but can also adjust the conversation according to the ongoing context.
Apart from that, the digital application also allows policyholders to submit claims online, saving time without having to come directly to the company office. However, for certain claims, policy holders are still required to include supporting documents in accordance with the provisions of the policy and company policies.
Digitalization, the Inevitable Future
Fauzi reminded that to achieve successful digital transformation, insurance companies must have comprehensive readiness in terms of resources and investment. However, this step is a necessity so that the life insurance industry can develop rapidly in the future, following technological developments and changing market needs.
With the increasing development of technology and changes in consumer behavior, digitalization will become the main foundation in shaping the future of the insurance industry in Indonesia. This transformation will of course affect the way insurance companies operate and provide services that are more efficient and easily accessible to all policyholders.
Positive Performance of PT Asuransi Jasindo Syariah, Revenue Grows 25.54% in Quarter III 2024
Sharia Insurance Revenue Increases Significantly
PT Asuransi Jasindo Syariah managed to record positive performance in the third quarter of 2024, with total sharia insurance revenue reaching IDR 203.79 billion. This figure shows a significant increase of 25.54% compared to the same period the previous year (YoY). Apart from that, the company’s total assets were also recorded at IDR 548 billion by the end of September 2024.
Performance Improvement and Distribution Expansion Strategy
In order to maintain its growth momentum, Asuransi Jasindo Syariah revealed a number of strategies to continue to encourage the company’s positive performance. Jasindo Syariah Insurance Company Secretary, Wahyudi, explained that the company will focus more on products that have been proven to make a large contribution to revenue. Apart from that, they will also carry out more optimal marketing and promotional campaigns to reach more consumers.
The company also plans to expand its distribution network by establishing new collaborations with various partners, such as banks, e-commerce and fintech platforms. This is expected to strengthen the distribution of sharia insurance products and expand public access to this service.
Digitalization and Operational Efficiency
Another strategy that is being implemented by Asuransi Jasindo Syariah is increasing operational efficiency and service quality. For this reason, the company is focused on accelerating the digitalization process and adopting automation technology in various insurance services. This step is expected to increase operational efficiency while providing a better experience for customers.
Wahyudi also added that the company will carry out an intensive educational campaign through various media to increase public awareness and understanding of the benefits of sharia insurance. With this approach, it is hoped that more people will understand the importance of sharia-based protection.
Positive Projections for the Sharia Insurance Industry
Wahyudi also highlighted that the sharia insurance industry in general experienced significant growth. Projections until the end of 2024 show that the assets of this industry are expected to increase by around 20% compared to the previous year. This increase was triggered by increasing public awareness about the importance of insurance as well as a shift in marketing trends which are increasingly focused on digital platforms.
Transformation for the Future
As part of the transformation and strengthening of the financial sector, Asuransi Jasindo Syariah has also separated its sharia business unit (spin off), in accordance with the mandate of Article 68 of the Sharia Banking Law Number 21 of 2008, which was amended by Law Number 4 of 2023 concerning Development and Strengthening of the Financial Sector (PPSK).
With these strategic steps, PT Asuransi Jasindo Syariah is optimistic that it can end 2024 with satisfactory results and continue its growth in the future.
Livestock Insurance Program in Kulonprogo: Protection for Farmers with Subsidies from the Ministry of Agriculture
A total of 98 cattle owned by farmers in Kulonprogo are now guaranteed by the livestock insurance program which receives subsidies from the Ministry of Agriculture. This program provides financial protection for breeders with a subsidy of IDR 150 thousand per year, so that breeders only need to pay IDR 50 thousand per head.
Head of the Livestock Division of the Kulonprogo Agriculture and Food Service (DPP), Eko Sulistyo, explained that this program had been running well, and the enthusiasm of breeders to participate was quite high. “With 98 cows guaranteed by insurance, we hope that more farmers will be helped,” he said.
During this year, only one cow has paid an insurance claim after dying due to a disease covered by the insurance program. The amount of claims received by breeders in Tanjungharjo Village, Kapanewon Nanggulan, reached IDR 10 million per head.
Eko also added that the existence of this program provides a sense of security for farmers, especially amidst the risk of disease that could attack livestock. “This program has proven to provide peace of mind, because farmers can protect their livestock from unexpected losses,” he explained. Therefore, his party plans to continue conducting outreach to increase breeder participation.
The Head of the Kulonprogo DPP, Drajat Purbadi, revealed that his party is encouraging more breeders to take part in this insurance program, by involving Puskeswan officers in each Kapanewon. “We continue to strive to get more farmers to take advantage of this program, especially because livestock are currently quite vulnerable to disease attacks,” said Drajat.
This livestock insurance program not only provides protection against the risk of livestock death, but also provides solutions for farmers in facing challenges in the world of livestock which is full of uncertainty. In the future, it is hoped that the livestock insurance subsidy quota can continue to be increased so that more farmers can benefit from it.
The Urgency of Compulsory Third Party Liability (TPL) Insurance in Indonesia, an Important Step for Driving Safety
Traffic accidents continue to be a serious problem in Indonesia. One of the incidents that recently emerged was an accident on the Cikampek-Purwakarta-Padalarang (Cipularang) toll road on November 11 2024, which re-emerged discussions regarding the importance of mandatory third party liability insurance (TPL).
Based on data from the National Police Traffic Corps’ Integrated Road Safety Management System (IRSMS), as of August 5 2024, 79,220 accidents were recorded. The highest accident occurred in April 2024, with 11,924 incidents. This figure shows that traffic accidents in Indonesia are still at a high rate, creating an urgency to have insurance that can protect third parties from material losses due to these incidents.
Why is mandatory TPL insurance important?
Chairman of the Indonesian General Insurance Association (AAUI), Heru Budi Herawan, emphasized that this is an important lesson for the public regarding the need for mandatory TPL insurance. As regulated in the P2SK Law (Financial Sector Development and Strengthening Law), TPL insurance aims to provide protection for third parties affected by accidents, especially material losses experienced.
Budi added that the accident on the Cipularang toll road, which caused billions of rupiah in losses, was a clear example of the importance of TPL insurance regulations. “Losses due to accidents can be very large, especially in the case of vehicles, even though fatalities are guaranteed by Jasa Raharja through social insurance,” he said.
Quick Response Steps and TPL Insurance Regulatory Process
Budi also expressed his appreciation to Jasa Raharja for being responsive in paying claims for accident victims. However, he emphasized that many similar accidents still occur, although on a smaller scale. Therefore, AAUI urges the government to immediately implement mandatory TPL insurance, no later than the first or second quarter of 2025.
The government, through the Ministry of Finance (Kemenkeu) and the Financial Services Authority (OJK), is working on regulations to implement this insurance. According to Budi, currently discussions regarding mandatory vehicle insurance discretion are still in the finalization stage at the Ministry of Finance’s Fiscal Policy Agency (BKF). “We are waiting for the right momentum for the government to submit its proposal to the President,” said Budi.
However, Budi reminded that even though the Presidential Decree (Keppres) and its implementing regulations are ready, the implementation of mandatory TPL insurance must still receive consultation from Commission XI DPR RI, as regulated in the P2SK Law.
Increasing Public Protection and Awareness
It is hoped that mandatory TPL insurance can provide more protection for people affected by accidents, especially for third parties who experience material losses. Implementing this insurance is also a strategic step in increasing awareness of the importance of insurance protection in Indonesia, which can minimize the financial impact arising from traffic accidents.
With mature regulations and fast implementation, it is hoped that TPL insurance can provide more security for motorists and ensure that every party affected by an accident can get their rights quickly and fairly.
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