Liga Asuransi – The insurance industry in Indonesia faces interesting dynamics approaching 2025, with various challenges and opportunities that can determine the direction of its growth. From settling claims cases to educating the public about the importance of insurance protection, industry players continue to innovate to answer customer needs and expectations. On the other hand, global challenges such as medical inflation, rising VAT and weakening people’s purchasing power add to the complexity of this landscape. This article will discuss the latest developments in the insurance industry, including the latest news and strategic steps to face challenges in the coming year.
Prudential Indonesia Completes Case of Arrears in Customer Claims in Medan
PT Prudential Life Assurance (Prudential Indonesia) announced that the case of outstanding customer claims in Medan worth IDR 20 billion has been resolved. Chief Customer & Marketing Officer Prudential Indonesia, Karin Zulkarnaen, explained that the rejection of the claim was based on certain reasons, especially related to pre-existing condition provisions.
“Every insurance product has terms and conditions, one of which is related to pre-existing conditions, namely health conditions that existed before the customer joined. “This condition is not covered,” said Karin on Friday (20/12/2024).
The Importance of Customer Transparency
Karin emphasized the importance of customers providing complete and honest health information when registering for insurance. This aims to provide a clear picture to the company regarding the health condition of customers, both those who have just joined and those who have been insurance participants for a long time.
“If customers do not convey their health conditions honestly, we do not have complete data about their medical history. “This can certainly influence decisions regarding claims,” he added.
Medan Case Resolution
Regarding the case in Medan, Karin confirmed that the problem had been resolved. The customer concerned has been contacted by Prudential Indonesia, and a complete explanation has been provided. “For every case, whether the claim is approved or not, we always communicate directly with the customer, not with other parties. “So, the case in Medan has been resolved,” he stressed.
When asked about the involvement of the Financial Services Authority (OJK) in this case, Karin said that she did not know whether the report had reached the regulator.
Prudential Indonesia Claims Performance
In the midst of this issue, Prudential Indonesia continues to record positive performance. Throughout the third quarter of 2024, the company paid claims and benefits amounting to IDR 13.6 trillion, an increase of 4% compared to the same period last year. The total claims completed reached 1.1 million claims, showing the company’s commitment to providing benefits to its customers.
Conclusion
The case of outstanding claims worth IDR 20 billion in Medan is a reminder of the importance of transparency between customers and insurance companies. With good communication and understanding of product provisions, it is hoped that similar cases can be minimized in the future. Prudential Indonesia is also committed to resolving every claim with a professional and fair approach.
The Importance of Casualty Insurance: Maximum Protection with Affordable Premiums
BRI Insurance (BRINS) continues to actively educate the public about the importance of having loss insurance to protect property and assets from various unexpected risks. Through collaboration with the Master of Management team at the Faculty of Economics and Business, University of Indonesia (FEB UI), BRINS introduced loss insurance products to residents in Pamulang, South Tangerang.
Eka Indria Sari, EVP Development and Operational Business Division of BRI Insurance, said that loss insurance plays an important role in maintaining financial stability when disaster strikes. “With very affordable premiums, people can get significant protection. “Once a disaster occurs, insurance is there to provide replacement, so that the financial burden can be minimized,” he said in an official statement on Sunday (22/12/2024).
Various Products for Various Needs
BRINS offers more than 70 types of loss insurance products designed to answer the needs of various segments of society. Starting from fire insurance, motor vehicles, houses, apartments, to business premises, even insurance for satellites is available.
Eka added that fire insurance is one of the superior products, especially for housewives, with a premium of only IDR 50,000 per year. “This product is in the form of compensation. So, if a disaster occurs, without the need for a long survey, compensation will be processed immediately. “In accordance with OJK regulations, we are obliged to disburse claims within a maximum of 10 days after the incident,” he explained.
Easily Accessible Digital Solutions
To make access easier for the public, BRINS presents a loss insurance purchasing service through the BRImo and BRINSmobile applications. Users simply select the insurance feature in the application, follow the instructions provided, and the insurance policy will be issued in a short time.
“The BRINSmobile application offers more complete protection, such as fire, motor vehicle and personal accident insurance. “With this digital solution, people can easily get the protection they need,” added Eka.
Reaching Small Business Actors
Not only targeting families or individuals, BRINS also provides protection solutions for small businesses. This is expected to help small businesses remain resilient in facing unexpected risks, as well as support the sustainability of their businesses.
Through continuous innovation and education, BRI Insurance hopes to increase public awareness about the importance of loss insurance, as well as expand financial inclusion in Indonesia. With BRINS, asset protection is no longer difficult or expensive.
12% VAT Increase in 2025: Solution or New Burden for Society?
In 2025, Indonesian people must be prepared to face an increase in Value Added Tax (VAT) from 11% to 12%. This policy is projected to increase state income and reduce dependence on foreign debt. However, the impact is predicted to be burdensome on society, especially the middle class whose purchasing power is increasingly weakening.
Direct Impact on Household Consumption
As a tax that is charged directly to consumers, an increase in VAT will automatically increase the prices of goods and services. Data shows a downward trend in people’s purchasing power throughout 2024, with household consumption in national GDP falling from 2.61% in the second quarter to 2.55% in the third quarter.
Not only that, the National Socio-Economic Survey (Susenas) of the Central Statistics Agency (BPS) recorded a decline in the number of the middle class in Indonesia. In 2024, the number of middle class residents will fall to 47.85 million people, from 48.27 million people in the previous year. Meanwhile, the vulnerable poor group increased to 67.69 million people in the same year, showing how fragile the community’s economy is.
The “Mantab” Phenomenon and the Savings Crisis
The wave of layoffs (PHK) also made the situation worse. In 2024, until August, 46,240 workers were recorded as being laid off, an increase from the same period in 2023 of 37,375 people. As a result, the phenomenon of “Mantab” or eating savings emerged, where people used their savings for daily needs. Data shows that savings balances under IDR 100 million have decreased by 40% since 2019.
Impact on the Insurance Industry
The national insurance industry is also expected to be significantly impacted. With purchasing power continuing to weaken, insurance products will be considered expensive and will not be a priority for the public. As a result, the insurance inclusion rate—which the government is currently working on—is in danger of stalling. Without insurance protection, the risk of people’s financial losses actually increases, which in the end can affect national economic stability.
Is it necessary to postpone the VAT increase?
Seeing this condition, steps to increase the VAT rate should be postponed until people’s purchasing power recovers. Even though it aims to increase state income, this policy risks slowing economic growth due to a decline in household consumption and economic activity. Without strong purchasing power, state income from other sectors will also be hampered.
The balance between increasing state income and protecting people’s purchasing power must be a top priority. By postponing the VAT increase, the government can provide space for people to recover their economic conditions, while ensuring national economic stability is maintained.
Source : https://mediaasuransinews.co.id/majalah/ppn-daya-beli-dan-asuransi/
OJK Encourages 6 Strategies to Overcome High Health Insurance Claim Ratio
Medical inflation continues to be a major challenge for the health insurance industry in Indonesia. The latest data from the Indonesian Life Insurance Association (AAJI) records that the health insurance claims ratio reached 139.5% in the third quarter of 2024. This means that the value of the claim paid by the insurance company far exceeds the premium received. With health insurance premiums of only IDR 14.98 trillion, claims that must be paid reached IDR 20.91 trillion, an increase of 37.2% compared to the same period last year.
In response to this challenge, the Financial Services Authority (OJK) has designed six strategic initiatives to help health insurance companies strengthen their ecosystem. OJK Deputy Commissioner for Insurance, Guarantee and Pension Fund Supervision, Iwan Pasila, revealed that these steps aim to increase efficiency, reduce the potential for misuse of medical services, and reduce the rate of medical inflation which is increasingly burdensome for the industry.
OJK’s main steps include:
- Host-to-Host Digitization: Linking insurance companies with hospitals for efficiency and preventing abuse.
- Medical Services Review: Ensure services meet patient needs.
- Medical Advisory Board: Provide clinical guidance and monitoring of treatment effectiveness.
- Co-Sharing Feature: Insurance participants cover part of the costs to encourage wise use of services.
- Coordination with BPJS: CoB scheme for claims cost efficiency.
- Healthy Lifestyle Education: Reduces the risk of disease and future claims.
Medical Inflation: A Global Phenomenon
Iwan Pasila explained that high medical inflation is not only happening in Indonesia, but is also a global phenomenon. Based on the Global Medical Trend Reports study by Willis Towers Watson and AON, medical inflation is consistently above general inflation, even reaching two to three times as much. The main causes include the tendency to overuse medical services, overuse of medicines, and unhealthy lifestyles.
Collaboration for the Future
With these six strategic initiatives, OJK hopes to help health insurance companies face the challenge of increasing medical inflation. Collaboration between OJK, insurance companies, hospitals and the community is the key to creating a health insurance ecosystem that is more efficient, sustainable and provides maximum protection for the community.
“Through these steps, we want to ensure that the health insurance ecosystem in Indonesia becomes stronger and able to provide added value for all parties,” concluded Iwan. Now, it’s time for all parties to work together to create the best solution for the future of health insurance in Indonesia.
Challenges and Opportunities for the Insurance Industry in 2025
The insurance and reinsurance industry is projected to face various major challenges in 2025. General Chair of the Indonesian Insurance Writers Community (Kupasi), as well as lecturer and risk management practitioner, Wahyudin Rahman, revealed that the coming year will be a period full of dynamics for this sector. He predicts a decline in performance due to significant changes affecting company structure, capital, business and operations.
“In 2025, the insurance and reinsurance industry will face great pressure because it has to adapt to major changes in various aspects, including company structure, capital and operations,” said Wahyudin to Kontan.co.id (20/12).
Implementation of PSAK 117 and Separation of Sharia Units
One of the main challenges facing the insurance industry is the implementation of the Statement of Financial Accounting Standards (PSAK) 117 which will become effective on January 1 2025. This policy requires companies to make significant adjustments in financial reporting.
Apart from that, the process of separating sharia units from conventional insurance companies, in accordance with regulations in effect until 2026, also adds to the burden on the industry. This process drives a wave of acquisitions and mergers to meet regulatory requirements. As a consequence, the number of companies providing conventional and sharia insurance services is predicted to decrease, which could affect market competition, product availability and options for customers.
HR and Competency Challenges
The need for quality human resources (HR) is another crucial issue. Wahyudin emphasized the importance of collaboration between insurance educational institutions and Professional Certification Institutions (LSP) to improve HR competency. This effort is considered strategic to ensure the industry remains competitive amidst the changes that are occurring.
Growth Opportunities amidst Challenges
Behind the various challenges, Wahyudin also sees opportunities that can be exploited by the insurance industry. Government regulations and programs, such as the implementation of mandatory third party liability (TPL) insurance for motor vehicles, are one of the main drivers of growth in this sector.
In addition, increasing public awareness of traditional insurance, as well as insurance products related to disasters, cargo and infrastructure, provides positive prospects. Food security and national development projects initiated by the government are also driving demand for relevant insurance coverage.
“Public interest in traditional insurance continues to increase, while products related to disasters, cargo and infrastructure have great potential, especially with national development,” explained Wahyudin.
Insurance Industry Asset Trends
According to data from the Financial Services Authority (OJK), insurance industry assets reached IDR 1,133.58 trillion as of October 2024, up 2.98% annually (YoY). In detail, commercial insurance assets reached IDR 914.03 trillion, an increase of 4.31% YoY, while non-commercial insurance assets of IDR 219.55 trillion experienced a decrease of 2.20% YoY.
Conclusion
The insurance industry in 2025 is faced with major challenges that require adaptation and innovation. However, opportunities for growth remain wide open with government regulations and increasing public interest in insurance products. Strategic collaboration, increasing HR competency and product innovation are the keys for the industry to survive and develop in the future.
Source : https://keuangan.kontan.co.id/news/ini-sejumlah-tantangan-industri-asuransi-di-2025
Sritex Case: Important Lessons from Credit Insurance to Mitigate the Risk of Default
Payment failure case involving PT Sri Rejeki Isman Tbk. (Sritex) and IndoBharat are in the public spotlight, especially in the role of credit insurance in protecting companies from the risk of bad debts. In this case, IndoBharat used trade credit insurance to protect its invoices. When Sritex was unable to pay off its obligations, the insurance company took over responsibility for paying the receivables.
The Strategic Role of Credit Insurance
According to Wahyudin Rahman, General Chair of the Indonesian Insurance Writers Community (Kupasi), credit insurance is designed to protect creditors from the risk of default by business partners. “This insurance helps reduce the impact of losses by providing compensation for uncollectible receivables,” explained Wahyudin.
However, Wahyudin considered that there were irregularities in this case, especially regarding the insurance company’s courage to bear the high risk from Sritex. He suspects that less stringent underwriting factors, including macroeconomic conditions and accumulated Sritex financing, were the cause.
Subrogation and Transparency
This case also raises the potential for subrogation, namely the insurance company’s right to demand that Sritex reimburse claims that have been paid to IndoBharat. “The lack of transparency in this process makes this case even more complex,” said Wahyudin.
The Importance of Regulation and Education
Wahyudin emphasized the need for wider socialization regarding credit insurance policies, including subrogation provisions and stricter risk evaluation. Regulations such as POJK 20/23 and the Financial Information Services System (SLIK) have actually provided a good basic framework for managing credit insurance.
However, he also noted the need to:
- Increased Risk Assessment Standards: So that insurance is only provided to business partners with measurable risks.
- Financial Transparency and Claims: Ensure all parties understand the claims and subrogation process.
- Business and Insurance Partner Cooperation: Increasing collaboration to mitigate the risk of default.
Main Benefits of Credit Insurance
As a financial solution, credit insurance helps maintain creditor cash flow stability even though it cannot directly protect against debtor bankruptcy. In the long term, educating credit insurance users is very important so that they understand the limits of protection and coverage offered.
Lessons from the Sritex Case
This case is a reminder of the importance of transparency, strict regulations and continuous education in credit insurance. With these steps, companies can be better prepared to face the risk of default and maintain the sustainability of their operations.
JRP-Insurance Preparations to Welcome Mandatory Third Party Liability (TPL) Insurance 2025
PT Asuransi Jasaraharja Putera (JRP-Insurance) is preparing strategic steps to welcome the implementation of mandatory Third Party Liability (TPL) insurance for motor vehicles which is planned to come into effect in 2025. Although the regulations are still in the process of being finalized, JRP-Insurance has prepared various aspects to support the policy the.
Product Ready, Waiting for Regulation
The Main Director of JRP-Insurance, Abdul Haris, revealed that the company already has a TPL insurance product that is ready to be implemented. However, the next steps depend on the regulations issued by the government. “As a product, we have a TPL. But the preparation [of mandatory TPL] is not ours, it’s up to the regulator. We are only preparing the product and will follow developments,” said Haris at a media gathering in Jakarta, Wednesday (18/12/2024).
Strengthening Infrastructure and Cooperation
Meanwhile, Corporate Secretary Head of PT Jasaraharja Putera, Widya Marisa, explained the various preparations being made by JRP-Insurance while waiting for regulations to come down. One of the main steps is to strengthen service infrastructure and expand cooperation with strategic partners.
“We continue to improve our infrastructure and collaboration with hospitals. We are also following the steps of PT Jasa Raharja as the parent company,” said Widya. Apart from that, JRP-Insurance also focuses on strengthening human resources (HR) within the company so that they are ready to support the implementation of the mandatory TPL insurance policy.
Widya added that for further details, JRP-Insurance is still waiting for directions from regulators such as the Financial Services Authority (OJK) and the Indonesian General Insurance Association (AAUI). “We are looking forward to this regulation together, because we want to provide the best for the Indonesian people, especially Jasaraharja Putera customers,” concluded Widya.
AAUI Encourages Implementation in 2025
AAUI General Chair, Budi Herawan, revealed that the plan to implement mandatory TPL insurance is targeted for the second semester of 2025. However, the process of issuing regulations is still a long way off. “The draft regulations already exist at the Ministry of Finance, at the Fiscal Policy Agency [BKF]. However, the hilal for implementing regulations is still not visible,” said Budi in a statement at the AAUI office, Tuesday (3/12/2024).
Budi also noted that Indonesia is the only country in ASEAN that has not implemented mandatory TPL insurance. This is of particular concern, considering the large potential of the motorized vehicle population in the country. Even so, the government is careful in making decisions to ensure that this policy does not burden the public, especially in the midst of high inflationary pressures.
“The hope is that in semester II/2025 the mandatory TPL insurance will be able to run. However, we understand the government’s concerns regarding the relatively high burden on society,” explained Budi.
Towards More Inclusive Insurance Services
With a large population and the number of motorized vehicles continuing to increase, implementing mandatory TPL insurance in Indonesia will be an important step in protecting the public from the risk of traffic accidents. Careful preparation from companies such as JRP-Insurance shows the industry’s commitment to supporting this policy. Now, the public only needs to wait for the regulator’s steps to realize this long-awaited policy.
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