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The insurance industry plays a vital role in a country’s economy by providing financial protection to individuals and businesses against a variety of risks. To ensure this industry remains healthy, sustainable and trustworthy, strict and dynamic regulations are needed. Insurance regulations not only protect the interests of policyholders, but also ensure that insurance companies and insurance brokers operate professionally, responsibly and in accordance with the standards set by the relevant authorities.
In Indonesia, the Financial Services Authority (OJK) has a major role in regulating and supervising the financial industry, including the insurance sector. Along with economic developments, technology and global challenges, OJK continues to revise and update regulations to adapt policies to current conditions. One form of reform is the publication of POJK 34/2024 concerning Development of the Quality of Human Resources in the Insurance Industry and POJK 36/2024 concerning the Implementation of Insurance and Reinsurance Company Business. These two regulations aim to improve workforce competency standards in the insurance industry and strengthen the governance of insurance, reinsurance and insurance broker companies to make them more transparent and professional.
On February 4 2025 at the Kempinski Hotel Jakarta, the author was invited to take part in a complete explanation from the OJK, below is the report.
This article will discuss in depth how POJK 34/2024 and POJK 36/2024 affect the insurance industry, especially for general insurance companies and insurance brokers. By understanding these regulatory changes, industry players can adjust their strategies to remain competitive and meet the requirements set by the OJK.
Summary of POJK 34/2024: Human Resource Quality Development in the Insurance Industry
The insurance industry is a sector that relies heavily on human resource (HR) expertise. The quality of the workforce in this industry determines the effectiveness of risk management, service to customers, and compliance with applicable regulations. To increase the competitiveness of the insurance industry in the digital era and increasingly dynamic global markets, the Financial Services Authority (OJK) issued POJK 34/2024. This regulation emphasizes the importance of systematic and sustainable human resource development so that the insurance industry can adapt to technological developments and changes in customer needs.
Objectives of POJK 34/2024
POJK 34/2024 is designed to improve the quality of human resources in the insurance industry to make it more competitive and professional. This regulation also aims to adapt workforce competency to developments in the digital era which increasingly influence insurance business patterns, such as digitalization of services, use of big data, and implementation of artificial intelligence (AI). With this regulation, OJK hopes that insurance companies, insurance brokers and reinsurance can have a workforce that is standardized, competent and has recognized certification so that they are able to provide the best service for customers and increase public trust in the insurance industry.
Main Provisions POJK 34/2024
This regulation regulates several main provisions that must be complied with by insurance companies, insurance brokers and reinsurance companies, including:
- Allocation of Funds for Human Resource Development
Each company is required to allocate a minimum of 3.5% of its total employee burden for training, education and workforce certification programs.
These funds must be used to improve employee competency, both in technical aspects of insurance and managerial skills.
- Standardization of HR Competencies
HR in the insurance industry must have certification recognized by the OJK according to their respective fields.
Companies are obliged to ensure that employees who occupy strategic positions have relevant skills and certification.
Improving the quality of the workforce must include mastery of regulations, underwriting practices, risk management and customer service.
- Periodic Reporting and Evaluation
Companies are required to report plans and realization of HR development programs periodically to the OJK.
This evaluation aims to ensure that each company actually implements the processing policy
Summary of POJK 36/2024: Business Administration of Insurance Companies and Reinsurance Companies
The insurance industry in Indonesia continues to grow with the increasing need for risk protection, both for individuals and corporations. To ensure that the implementation of insurance business is more transparent, efficient and in line with technological developments, the Financial Services Authority (OJK) issued POJK 36/2024. This regulation aims to strengthen governance, increase public trust, and adapt the rules to the digitalization trend that is increasingly affecting the insurance industry.
Objectives of POJK 36/2024
POJK 36/2024 is designed to ensure that insurance and reinsurance companies have better governance, are more transparent, and are able to adapt to the modern insurance business ecosystem. This regulation also adapts several provisions to technological developments and the digitalization of insurance services, including the use of analytical data, claims automation, and digital distribution of insurance products.
With this POJK, it is hoped that insurance companies can increase operational efficiency and provide faster, transparent and technology-based services to customers. Apart from that, this regulation also aims to reduce the risk of abuse in insurance practices and ensure that insurance agents and brokers work professionally and in accordance with industry standards.
Main Provisions POJK 36/2024
- Expansion of Business Scope for Insurance and Reinsurance Companies
Insurance and reinsurance companies are now given greater flexibility in developing their business, including by introducing new products that suit market needs.
This regulation also provides space for sharia insurance to expand the scope of its products and services.
- Strengthening Rules regarding Claims and Insurance Agent Behavior
Rules regarding claims management have been tightened to ensure that the claims settlement process is carried out more quickly and transparently.
Insurance agents must have recognized certification and implement practices that comply with industry codes of ethics to prevent abuse in the marketing of insurance products.
- Digitalization of Insurance Business Operations
POJK 36/2024 encourages insurance and reinsurance companies to utilize digital technology in all business processes, from marketing, underwriting, to claims management.
The use of InsurTech (Insurance Technology) and big data is an important part of the transformation of the insurance industry.
- Implications for Insurance Brokers
Changes in Risk and Claim Management Mechanisms
Insurance brokers must understand the changes to a more stringent and transparent claims process in order to better assist clients.
Brokers must also follow developments in digital-based risk management systems implemented by insurance and reinsurance companies.
- Opportunities in the Digital Insurance Market
With the increasing digitalization of insurance, insurance brokers can utilize technology to offer digital-based services, such as online insurance consultations, product comparison platforms, and more efficient policy management systems.
Collaboration with InsurTech is a strategy that brokers can use to stay relevant in the digital era.
With the implementation of POJK 36/2024, the Indonesian insurance industry will become more transparent, efficient and technology-based. Insurance brokers must be ready to adapt to these changes in order to remain competitive in providing the best service to their clients.
Impact of POJK 34/2024 and POJK 36/2024 on the General Insurance Industry
The implementation of POJK 34/2024 and POJK 36/2024 brings significant changes to the general insurance industry in Indonesia. With a main focus on developing human resources and strengthening insurance company governance, this regulation aims to create an industry that is more professional, transparent and ready to face the digital era. However, the implementation of this regulation also brings its own challenges for general insurance companies who must adapt their operations to remain competitive and comply with the new regulations.
- Increasing Public Trust in Insurance
Public trust in the insurance industry is often a challenge, especially in terms of transparency of the claims process and quality of service. With stricter regulations in POJK 36/2024, insurance companies are required to have better governance, including handling claims with a faster and more transparent process.
Meanwhile, POJK 34/2024 which focuses on improving the quality of human resources also contributes to building a positive image of the insurance industry. With the requirement to increase workforce competency through training and certification recognized by the OJK, the services provided by general insurance companies are expected to become more professional and in accordance with international standards.
This regulation not only provides legal certainty for customers but also ensures that general insurance companies have a workforce that is competent in managing risks and providing optimal protection solutions.
Opportunities and Challenges for General Insurance Companies
- Adaptation to New Regulations
General insurance companies must allocate a larger budget for human resource development, especially in the form of training and certification.
Standardizing workforce competency can be a challenge for companies that do not yet have a good HR management system.
- Investment in Digitalization
POJK 36/2024 encourages insurance companies to accelerate the adoption of digital technology in insurance services, including underwriting automation, AI-based claims and digital marketing.
However, this digital transformation also requires readiness in terms of technological infrastructure and data security, especially in facing increasingly complex cyber threats.
- Increased Operational Costs
Implementing new standards in risk management, corporate governance and digitalization requires large investments in the short term.
Companies that are unable to adapt quickly will face challenges in maintaining competitiveness in the market.
- Influence on General Insurance Products
Adjustments in Underwriting Policies and Premiums
With the new governance standards in POJK 36/2024, general insurance companies need to adjust underwriting policies to be more accurate in assessing risks.
This regulation may also have an impact on adjusting the premium structure, especially for products that have a high level of risk.
- Increased Demand for Sharia-Based Insurance
POJK 36/2024 provides wider space for sharia insurance, including in terms of product diversification and market expansion.
With increasing public awareness of sharia financial principles, general insurance companies that have sharia units can take advantage of this opportunity to expand their business.
Overall, the implementation of POJK 34/2024 and POJK 36/2024 will have a major impact on the general insurance industry. With stricter regulations, this industry will become more professional and trustworthy in the eyes of the public. However, to survive and thrive, general insurance companies must invest in human resource development, digital transformation, and adapt their products to remain competitive in an ever-evolving market.
The Strategic Role of Insurance Brokers in Facing POJK 34/2024 and POJK 36/2024
As part of the insurance industry ecosystem, insurance brokers have an important role in helping companies, both insurance and clients, understand and adapt to the latest regulations set by the Financial Services Authority (OJK). POJK 34/2024 and POJK 36/2024 bring significant changes to the industry, including in aspects of HR management, corporate governance and digitization of insurance services. In this situation, insurance brokers not only act as intermediaries between customers and insurance companies but also as strategic consultants who can help clients understand and adapt insurance policies to new regulations.
- As a Consultant in Adapting to New Regulations
One of the main roles of insurance brokers in dealing with POJK 34/2024 and POJK 36/2024 is to act as a consultant for clients in adapting to new regulations. Given that these regulations emphasize increased governance and transparency in the insurance business, companies purchasing insurance products need a deeper understanding of how these regulatory changes impact their protection needs.
A competent insurance broker must have a thorough understanding of the new rules and how they impact various lines of business. Some of the duties a broker must perform in this role include:
- Analyze client insurance needs based on the latest regulations.
- Adapt policy contracts to the provisions of POJK 36/2024, especially in terms of claims management, agent behavior and permitted business coverage.
- Providing education to clients about how this regulation increases their protection and what needs to be considered in choosing an appropriate insurance policy.
- Assisting Clients in Selecting Appropriate Insurance Products
With the changes in POJK 36/2024, insurance companies will make adjustments to their products and underwriting policies. Therefore, insurance brokers must play a role in helping clients understand these changes and choose the products that best suit their needs.
This new regulation also opens up opportunities for the development of digital and sharia-based products, so brokers must be ready to provide the best recommendations, both for conventional and sharia protection. Brokers must also have an understanding of how these regulations affect premium prices, policy benefits, and the risks borne by insurance companies.
Some steps that brokers can take to help clients choose the right product are:
- Compare insurance products in accordance with new regulations.
- Provide recommendations based on client risk profile and new standards in the industry.
- Adapting client insurance coverage to new policies regarding transparency and governance.
- The Importance of Digitalization for Insurance Brokers
- POJK 36/2024 specifically emphasizes the importance of digitalization in the insurance business. This provides both a challenge and an opportunity for insurance brokers to develop technology-based services to remain relevant in the competitive industry.
Insurance brokers who want to survive in the digital era must adopt various technology solutions, such as:
- Use of digital platforms for consultation and client services.
- Implementation of a cloud-based insurance management system to simplify policy and claims management.
- Utilization of InsurTech to automate the underwriting process and risk analysis.
Digitalization not only helps brokers in improving operational efficiency but also provides a competitive advantage in reaching more customers. Brokers who adopt technology will be faster in providing solutions to clients and will be able to compete with new business models in the insurance industry.
- Increasing the Competency of the Broker Team
POJK 34/2024 requires insurance companies, including brokers, to allocate 3.5% of their total employee burden for HR development. This means insurance brokers must ensure that their teams have the appropriate certifications and competencies to comply with the new regulations.
Several steps that insurance brokers can take to improve their team’s competency include:
- Participate in training and certification recognized by OJK.
- Improve understanding of risk, underwriting and the latest regulations.
- Develop expertise in data analysis and digitization of insurance services.
By having a competent and certified workforce, insurance brokers can provide higher quality, transparent services and in accordance with industry standards set out in the latest POJK.
With POJK 34/2024 and POJK 36/2024, the insurance industry will experience major changes, both in aspects of governance, human resource management and digitalization of services. Insurance brokers have a strategic role in helping clients understand and adapt to these regulatory changes.
To remain competitive, insurance brokers must:
- Become a reliable consultant in helping clients adapt to new regulations.
- Helping clients choose insurance products that comply with the latest policies.
- Adopt digitalization to be more efficient and competitive in the industry.
- Ensure that the broker team has expertise and certification in accordance with POJK 34/2024.
With the right strategy, insurance brokers can not only survive in the new regulatory era but can also take advantage of emerging opportunities to expand the market and improve the quality of service for their clients.
Strategies for Insurance Brokers in Facing Regulatory Changes
With the implementation of POJK 34/2024 and POJK 36/2024, the insurance industry in Indonesia is entering a new phase that demands adjustments in governance, human resources and digitalization of services. Insurance brokers have a strategic role in bridging this change by ensuring that they remain competitive, professional and able to provide added value to clients. For this reason, the right strategy is needed so that insurance brokers can adapt to the latest regulations and remain relevant in an increasingly dynamic industry.
- Adopting Digital Technology in Insurance Services
One of the biggest impacts of POJK 36/2024 is the push for digitalization of the insurance industry. Insurance companies are required to be more transparent, fast and efficient in managing policies and claims. Insurance brokers must adapt to this trend by adopting digital technology and InsurTech to keep their services relevant.
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Several steps that insurance brokers can take in adopting digitalization:
- Developing an online platform for consulting, purchasing and managing insurance policies in real-time.
- Using big data and analytics to understand client needs and provide more precise product recommendations.
- Leveraging artificial intelligence (AI) for administration automation, risk analysis, and customer service.
- Implement a CRM (Customer Relationship Management) system that allows more effective communication with clients.
This digitalization not only increases operational efficiency but also expands the reach of insurance brokers in reaching more customers with faster and more modern services.
- Increasing HR Competency and Certification
POJK 34/2024 requires insurance companies, including insurance brokers, to allocate 3.5% of employee expenses for HR training and development. This means insurance brokers must focus more on improving the competency of their workforce to remain competitive and meet industry standards set by the OJK.
Steps that can be taken to improve HR competency:
- Participate in training and certification recognized by OJK, especially in the fields of underwriting, claims and risk management.
- Conduct regular internal training to increase understanding of new regulations and industry trends.
- Encourage workers to obtain professional licenses to increase the credibility of broker services.
By having a competent and certified team, insurance brokers can be more trusted by clients and insurance companies as professional strategic partners.
- Collaboration with Insurance and Reinsurance Companies
In facing regulatory changes, insurance brokers need to establish strategic partnerships with insurance and reinsurance companies that have adapted to the latest regulations. This collaboration will ensure that brokers can offer insurance solutions that comply with the new provisions and provide added value to their clients.
Several forms of collaboration that can be carried out:
- Collaborating with insurance companies that have implemented digitalization in policy and claims services.
- Ensure that all insurance partners comply with POJK 36/2024, so that the products and services offered remain in accordance with regulations.
- Collaborate with global reinsurers to access additional capacity to provide broader protection for clients.
By building a strong network, insurance brokers can provide more diverse and trusted solutions for their customers.
- Customer Education Regarding Changes in Insurance
As an intermediary between customers and insurance companies, brokers have a responsibility to provide education to clients regarding the impact of this new regulation. Many companies and individuals may not fully understand how POJK 34/2024 and POJK 36/2024 will affect their insurance policies. Therefore, brokers must be proactive in conveying information and helping clients adapt to existing changes.
How brokers can provide education to customers:
- Organize seminars or webinars about new regulations and their implications for insurance policies.
- Create educational content via blogs, videos, or social media to explain in simple terms how these regulations impact businesses and individuals.
- Providing specialized consultations for clients who wish to understand more deeply about how these regulations may impact their insurance coverage.
By providing the right education, insurance brokers not only help clients understand regulatory changes but also build trust and increase customer loyalty.
Conclusions and Recommendations
The implementation of POJK 34/2024 and POJK 36/2024 brings fundamental changes to the insurance industry, especially in human resource development, corporate governance and digitalization of services. POJK 34/2024 emphasizes improving the quality of the workforce through stricter training and certification, while POJK 36/2024 strengthens transparency, claims processes and digitalization of insurance company operations. This regulation aims to increase public trust in the insurance industry, ensure professionalism throughout the business chain, and prepare the industry to face an increasingly competitive digital era.
For insurance brokers, these regulations require rapid adaptation to remain relevant. The broker’s role is now not only as an intermediary, but also as a strategic consultant who helps clients understand the impact of new regulations and choose optimal insurance coverage. In addition, brokers must adopt digital technology to be more efficient, responsive and able to provide added value to customers in an increasingly technology-based ecosystem.
Recommendations for Industrial Players
- Adapting business strategies to new regulations
Insurance companies and brokers must ensure their policies, operational processes and governance comply with the latest regulations.
Increasing efficiency through digitalization of services is an important step to face market demands.
- Strengthening technology and human resources as the key to success
Investment in digital systems such as InsurTech and automation to increase service speed and transparency.
Increasing workforce competency through training and certification according to OJK standards, so that professional staff in the insurance industry are more qualified and able to compete.
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