Liga Asuransi – Entering the fourth quarter of 2025, the insurance industry in Indonesia is facing quite challenging dynamics. Remaining high inflation, global market volatility, and rising reinsurance costs are forcing many companies to review their protection strategies. At the same time, most corporate insurance policies will be entering their renewal period, making this period crucial for ensuring optimal business protection.
Unfortunately, many policyholders don’t fully understand the terms of their coverage. Important clauses are often overlooked or not explained in detail by insurance agents. As a result, when a claim occurs, the company only realizes that not all risks are actually covered.
This is why the role of insurance brokers will be crucial by the end of 2025. Brokers work independently on behalf of clients, helping review policies, identify potential gaps in coverage, and ensure all risks are properly managed.
L&G Insurance Brokers, as one of the leading insurance brokers in Indonesia, is ready to help your company conduct a comprehensive policy review and risk analysis to avoid being trapped by hidden risks in the 2025 policy.
Insurance Market Situation in Q4 2025
As 2025 approaches, the Indonesian insurance market is entering a phase many observers call the “era of risk selectivity.” Insurance companies are becoming more cautious about accepting new coverage and tightening their underwriting processes. Meanwhile, corporate clients are facing increasing operational cost pressures, leading them to focus more on premium prices than on the quality of protection.
a. Premium Increases, Capacity Decreases
Property and liability insurance premium increases are expected to increase in Q4 2025. The main contributing factors include:
- Global inflation and rising construction costs, which increase the insured value.
- A number of reinsurerInternationally, the company is withdrawing capacity from the Southeast Asian market due to the increasing frequency of large claims from 2022–2024.
- Pressure from the implementation of IFRS 17 and the OJK’s capital adequacy policy has made local insurance companies more cautious about taking on large risks.
As a result, many companies in Indonesia are starting to receive quotations with premiums 10–25% higher than last year — even for the same risks.
b. Company Focus Shifts to “Low Prices”
With the economy still not fully recovered, most companies are opting for an efficiency approach. Many management teams are asking procurement teams to find the lowest premiums without considering differences in wording and risk coverage.
In fact, this is precisely the biggest trap in 2025 insurance policies — lower prices often mean narrower coverage.
Simple example:
Two insurance policies with the same coverage of Rp50 billion could have vastly different coverages — one might exclude the risk of flooding or business interruption, which are crucial for the manufacturing or logistics sectors.
c. Changing Landscape Between Agents and Brokers
Amidst this situation, a major shift in market behavior occurred.
- Insurance agents focus on distribution and sales volume, following the insurance company’s directives.
- Insurance brokers, on the other hand, act as independent risk advisors who assess the client’s condition first before recommending an insurer.
Trends in 2025 show that more and more large companies—particularly in the infrastructure, energy, manufacturing, and logistics sectors—are turning to brokerage services. They realize that the claims process and policy wording cannot rely solely on explanations from agents.
Companies now need not just “policy buyers,” but “risk strategy partners” who can deeply understand their business.
d. Momentum for Policy Renewal and Evaluation
Q4 is always a critical time for many corporations, as most annual insurance contracts expire in December. During this time, small decisions can have a big impact:
- Wrong wording → claim may be rejected.
- Not updating asset values → underinsurance occurs.
- Not paying attention to sublimits → protection is not optimal.
Therefore, a comprehensive policy review in Q4 is not just a routine, but a strategic necessity.
What Your Agent Isn’t Telling You
Many companies assume that when they purchase an insurance policy, all risks are automatically covered. However, the reality is not that simple. There are many important points that insurance agents often don’t explain in detail, either due to time constraints, sales pressure, or simply because the clauses are too technical to discuss upfront.
Here are some “little secrets” in insurance policies that you should understand before you regret it later.
a. Hidden Risk Exclusions
Every insurance policy has a section called an exclusion clause — a list of risks that the insurer does not cover.
The problem is, this part is often not discussed by agents at closing.
Some common exceptions that are often overlooked include:
- Damage due to human error.
- Losses due to external power outages.
- Flood and earthquake risks are not automatically included in standard policy wording.
- Debris removal costs which are not included in the main limit.
When claims occur, companies realize that most of the losses cannot be compensated.
This is where the broker’s role is important in negotiating the policy wording and ensuring any exclusions can be minimized or added as endorsements.
b. Limit and Sublimit: Deceptive Numbers
Many customers only see the big numbers on the front page of the policy — for example, “Insured Amount: Rp100,000,000,000.”
However, what the agent doesn’t explain is that those large numbers are often divided into certain sub limits, such asi:
- Flood only Rp. 5 billion,
- Damage due to machinery (MB) Rp. 2 billion,
- The maximum cost of debris removal is IDR 500 million.
This means that when a major disaster occurs, the compensation received may be far below initial expectations.
Experienced insurance brokers like L&G Insurance Brokers always conduct wording audits to ensure sublimits align with the company’s actual risk profile and exposure.
c. Wording Changes in 2025
Since the implementation of IFRS 17 and the latest adjustments to OJK regulations, many insurance companies have updated their policy wording.
However, these changes are rarely explained in detail to customers.
Common examples:
- Clausebusiness interruptionnow demands stricter proof of loss of income.
- Some clausescyber riskremoved from the main policy and separated into a separate product.
- There are additional restrictions for contractual risks (contractual liability).
Without adequate understanding, companies can misinterpret true coverage — feeling secure when in fact the risk gap is widening.
d. The Claims Process is Not as Easy as It Sounds
We often hear agents say: “Don’t worry, sir, if there is a claim, we will help you.”
However, in reality, the insurance claims process is very technical and lengthy — starting from loss notification, appointing a loss adjuster, verifying documents, to assessing the actual loss.
If the wording is unclear, the claim can:
- Postponed,
- Trimmed in value, or
- Even completely rejected.
Without mentoringWith a broker, the company must navigate this entire process on its own—dealing directly with the insurer, who is naturally guided by their own internal policies. Brokers like L&G Insurance Brokers have a team of claims specialists tasked with ensuring clients receive fair and timely claims payments.
e. Additional Risks That Are Not Automatically Included
Many companies only realize after the fact that certain risks aren’t automatically covered by standard policies. For example:
- Risk of damage due to small renovation projects in the factory area,
- Supply chain interruption,
- Third party liability (public liability) arising from accidents in the business area,
- Or losses due to IT system failure.
Such risks should be explicitly included throughendorsementor additional police.
Hidden Risks That Can Harm Your Company
In practice, many companies feel secure because they already have an active insurance policy. However, when a risk actually occurs, it becomes clear that the protection they have isn’t as strong as they imagined.
This is what is known as “hidden risk” — a hidden risk in the policy that can cause significant losses even though premiums have been paid every year.
Here are some of the most common hidden risks often found in company policies in 2025.
a. Underinsurance: The insurance value does not reflect reality.
Many companies don’t update their asset values regularly. Due to inflation, the value of buildings, machinery, and stock increases sharply, but the insured value remains the same as the previous year.
When a claim occurs, the company will be subject to a prorata clause — compensation is paid in part, not in full.
Real case example:
A factory with an actual asset value of Rp100 billion is only insured for Rp70 billion. If a fire occurs, resulting in Rp30 billion in losses, the company will only receive a payout of around Rp21 billion, as it is deemed to be covering the 30% difference. Professional brokers like L&G Insurance Brokers typically conduct a valuation review and asset adequacy check before renewal to avoid the risk of underinsurance.
b. Gap Coverage: Protection Does Not Cover All Risk Exposures
Many policies appear comprehensive on the surface, but actually contain coverage gaps. For example:
- The property policy is active, but does not cover flood or earthquake risks.
- Machinery Breakdown policy is active, but does not cover Business Interruption due to machinery breakdown.
- The liability policy is active, but does not cover third-party contractors or vendors.
This kind of gap is dangerous because it can cause companies to lose billions of rupiah when an incident occurs, even if they feel they are “insured.”
c. Inadequate Liability Wording
For companies that interact with the public, vendors, or projects, the risk of legal liability is enormous.
However, many policies contain significant limitations:
- Does not bear any liability due to contracts (contractual liability).
- Does not cover injuries resulting from third party negligence.
- Does not protect management from lawsuits (D&O liability).
In 2025, with increasing legal awareness and business litigation in Indonesia, liability risks will increase. That’s why insurance brokers like L&G Insurance Brokers consistently review liability policy wording in detail, including cross-liability, principal inclusion, and hold harmless clauses.
d. Claims Rejected Due to Unclear Documents or Definitions
One of the main reasons claims are rejected is unclear risk definitions in the policy.
Example:
- A definition of “flood” that does not include rainwater runoff.
- The definition of “machine failure” only applies when the machine is operating, not when it is on standby.
- Or administrative errors such as the absence of proof of asset ownership in the schedule list.
Claims like these often result in lengthy disputes and loss of time and business reputation. Insurance brokers play a crucial role in this.oversee the claims process from the start— ensure wording and evidence are appropriate, not after the problem occurs.
e. Emerging Risks: New, Uncovered Threats
The year 2025 will bring significant changes to companies’ risk profiles. Some new risks aren’t even covered by conventional policies, such as:
- Cyber risk: ransomware attacks, data breaches, or ERP system downtime.
- Supply chain disruption: delays in importing raw materials due to global geopolitics.
- Environmental liability: claims resulting from industrial waste pollution or leakage.
- Technology failurein the energy and infrastructure sectors.
Most insurance agents still focus on traditional products, leaving clients without a clear understanding of these modern risks. L&G Insurance Brokers actively monitors trends.emerging riskglobal and help customers adjust policies to remain relevant to face new risks in 2025 and beyond.
Mini Conclusion: Hidden Risks Are Real
Hidden risks aren’t theoretical — they’re real, and often the root cause.irreparable financial loss. Therefore, understanding what is and isn’t written in the policy is just as important as purchasing the policy itself.
“A good policy is not just a document — it is the result of thorough risk analysis and client-friendly negotiations.” That is our working philosophy.L&G Insurance Brokersin protecting businesses in the era of uncertainty 2025.
In an increasingly complex and selective market situation such as in Q4 2025, the role of insurance brokers becomesincreasingly vitalfor the business world in Indonesia. If an agent works on behalf of an insurance company, thenBrokers work in the interests of clients., helping them get the best protection with the right risk structure — not just a low price.
a. Broker as Independent Risk Advisor
Insurance brokers are not just intermediaries.
Its main function is as an independent risk advisor who understands the client’s business conditions comprehensively.
Companies like L&G Insurance Brokers carry out a comprehensive analysis process:
- Conduct risk surveys and site inspections to understand the client’s actual risk profile.
- Prepare risk recommendations so that the company knows what risks must be borne and which can be avoided.
- Comparing offers from various insurance companies (comparative placement).
- Providing objective advice on wording, limits, and exclusions before the policy is issued.
The goal is simple: not to sell products, but to ensure clients’ businesses have protection that actually works when needed.
b. Brokers as Negotiators Who Side with Clients
In the corporate insurance world, negotiating power often determines how well your policy protects assets.
Brokers have extensive access to various insurance companies and underwriters, both local and international, so they are able to:
- Negotiating more flexible and protective wording.
- Lower premiums without sacrificing risk coverage.
- Developing an integrated insurance program, including property, liability, marine cargo, and cyber.
c. Brokers as Strategic Partners in the Claims Process
The claims process is the true test of a policy. When a loss occurs, clients need more than just documentation, they need an advocate who understands the technicalities and legalities of the policy.
Brokers help from the beginning:
- Prepare claim reports and documentation according to policy provisions.
- Coordinate withloss adjusterand insurance companies.
- Follow up until claim payment is received in full.
d. Brokers as Business Continuity Partners
Insurance is not only financial protection, but also a part ofbusiness continuity strategy. In 2025, with risks increasingly diverse — from climate change to supply chain disruptions to cyber threats — companies need partners who can:
- Prepare long-term risk mapping,
- Create risk mitigation that is realistic and within budget,
- Provide risk reports to support audit, tender or banking purposes.
Companies that work with professional brokers will alwaysone step more prepared to face unexpected events, because their protection is based on analysis, not assumptions.
Brokers Are Not Just Middlemen
In an increasingly competitive market, insurance brokers are the guardians of your business interests. They are paid not by insurance companies, but by the trust of clients who want to feel secure in a world full of uncertainty.
Conclusion & Recommendations: It’s Time to Revisit Your Protection in Q4 2025
As we approach the end of 2025, the business and industrial world in Indonesia faces a complex situation: premiums are rising, operational risks are becoming more diverse, and many old policies are no longer relevant to current needs.
Amidst efficiency pressures and global economic uncertainty, many companies are unknowingly taking on hidden risks by focusing solely on premium prices — not on the substance of the protection.
Now is the perfect time for every company to conduct a comprehensive policy audit and risk analysis. Don’t wait until a claim occurs to discover coverage gaps that should have been anticipated early.
Independent and experienced insurance brokers play a crucial role in situations like this. They are not simply intermediaries, but strategic advisors who help companies understand and properly manage risks.
Recommendation:
Before renewing your policy or signing an extension at the end of this year, make sure you discuss it with a professional broker who understands your business thoroughly.
L&G Insurance Brokers, with over 30 years of experience in the Indonesian insurance industry, is ready to help you review,negotiate, and ensure every aspect of protection truly meets your company’s operational needs.
Contact the L&G Insurance Brokers team today for a free policy review and comprehensive risk analysis before 2026. Because in the world of insurance, what you don’t know can be your biggest risk.
