Liga Asuransi – On June 17, 2025, Mount Lewotobi Laki-Laki located in East Flores, East Nusa Tenggara, again showed its volcanic activity with a major eruption that surprised many. This eruption spewed a column of ash more than 5,000 meters high, causing ash rain that hit settlements, closed transportation routes, and forced thousands of residents to evacuate from the affected areas. Several airports in the NTT area were forced to stop operating, while local economic activity was paralyzed in an instant.
Indonesia, known as the Ring of Fire, is no stranger to geological risks such as earthquakes and volcanic eruptions. However, behind every natural disaster, there are major challenges faced by the insurance industry, ranging from increasing claims, re-evaluation of risk portfolios, to the need for innovation in protection products. The Lewotobi eruption this time is a real reminder of the importance of financial protection through insurance, both for individuals, business actors, and large institutions.
This article will explore in depth how the eruption of Mount Lewotobi has had direct and indirect impacts on various insurance business lines, including property, vehicles, aviation, marine cargo, and agriculture. In addition, it will also discuss the strategic role of insurance brokers in helping clients understand policy coverage and opportunities for developing products that are more adaptive to the risk of natural disasters in the future.
Chronology and Scale of the Eruption
The massive eruption of Mount Lewotobi Laki-Laki occurred on Tuesday afternoon, June 17, 2025, at around 17:35 WITA. The mountain located in East Flores, East Nusa Tenggara, has shown a significant increase in activity since early June. However, in the two days leading up to the eruption, the number of volcanic earthquakes increased sharply, prompting PVMBG to raise the status to Level IV (Alert), the highest status in the Indonesian volcano warning system.
The eruption that afternoon lasted for almost seven minutes and spewed a column of ash more than 11,000 meters into the atmosphere. Thick ash soared and spread in various directions, carrying gravel and pyroclastic material to surrounding villages such as Pululera, Nurabelen, and Boru. The sky at several points even turned as dark as night, accompanied by the sound of explosions that could be heard up to a radius of tens of kilometers. Hot clouds also slid down various sides of the mountain slopes, causing damage to vegetation and forcing residents living within a radius of 7 to 8 kilometers to be evacuated immediately.
PVMBG together with BNPB immediately expanded the danger zone, setting a ban on activities up to 7 kilometers from the active crater, and 8 kilometers in the southwest and northeast sectors. More than 10,000 affected residents were immediately evacuated to safe points. Several main land routes were disrupted due to the thick ash covering the roads, while air access was also paralyzed. Gewayantana Airport in Larantuka and Frans Seda in Maumere were completely closed, and a number of international flights to Indonesia, including those to Bali, were canceled due to the spread of volcanic ash that reached southern airspace.
Until midnight on the same day, there had been five subsequent eruptions with ash column heights varying between 2,000 and 5,000 meters. Volcanic activity such as gust earthquakes and shallow earthquakes continued, indicating that the potential for further eruptions was still high. Authorities reminded the public of the continued threat of rain lahars that could form from the flow of volcanic material mixed with water when it rains.
This eruption not only disrupted the activities of the surrounding community, but also had a domino effect on connectivity, logistics, the local economy, and more broadly: it triggered alertness in the national insurance sector which is now faced with a series of potential claims in various sectors.
1. Property Insurance
As the most common and widespread insurance line in the commercial and residential sectors, property insurance is one of the most affected by the eruption of Mount Lewotobi. With many buildings exposed to volcanic ash, hit by rockfalls, and experiencing structural pressure, the potential for claims has increased sharply, especially in the East Flores area and its surroundings.
- Structural damage & ventilation: Heavy rain of gravel and ash caused roof damage, blocked ventilation ducts, and disruption of electrical systems in commercial and residential buildings.
- Liability clause: Many property policies include natural disaster coverage, but volcanic eruptions often require special endorsements—this often triggers discussions in claims about geological risk exclusions.
2. Motor Vehicle Insurance
In areas where people’s mobility depends on personal vehicles or company operations, motor vehicle insurance faces a spike in risk due to volcanic ash exposure. The abrasive nature of ash can damage engine components, cooling systems, and vehicle bodies—triggering a large number of potential claims from vehicle owners who are directly or indirectly affected.
- Abrasion & engine damage: Volcanic ash is abrasive – it can cause engine valve wear, clogged filters and scratched paint.
- Potential spike in claims: In areas affected by heavy ash fall, the frequency of vehicle insurance claims tends to increase sharply, especially for air filter and exterior body maintenance.
3. Travel Insurance
As the main route connecting the islands and the gateway for tourists to East Nusa Tenggara and Bali, the aviation sector has been greatly impacted by the eruption. Aviation insurance—both covering fleet damage and operational disruption—faced major challenges with the many cancellations, delays, and technical damage caused by volcanic ash in the air and on runways. Some of the concrete impacts include:
- Airport closures & delays
Airports in Flores (Maumere & Larantuka) and Bali experienced temporary closures. In Bali (Gusti Ngurah Rai) there were around 40 flights cancelled due to volcanic ash.
In an average of 4 days, 84 flights (36 departures, 48 arrivals) were stranded in Bali. Airlines such as Air India, Singapore Airlines, Virgin Australia, Jetstar, Air NewZealand, and Korean Air were affected. - Impact of insurance
Airline policies face claims for aircraft damage due to ash exposure (engines, sensors, paint).
Passengers face delay and cancellation claims due to force majeure—although this often results in claims being rejected due to exclusion clauses.
As an archipelagic country that relies heavily on sea and land transportation, logistical disruptions due to volcanic eruptions are not just operational constraints, but also financial threats. Marine cargo & inland transit insurance is affected by distribution delays, cargo damage, and disruptions to supply chains due to ash and transportation access closures.
- Logistics disruption: Land and sea routes are disrupted due to low visibility and airport/port closures, delaying shipments of goods.
- Potential cargo claim: Goods exposed to ash or damaged due to delays increase the risk of cargo insurance claim costs.
- Force majeure exclusion: Transportation policies often include an extraordinary events clause, so it is necessary to examine the detailed policy wording to determine liability.
- Agriculture & Livestock Insurance
As a relatively fertile area with a fairly high livestock population on the slopes of the volcano, the area around Mount Lewotobi Laki-Laki experienced a major impact on the agricultural sector. Farmland was covered in ash, livestock lost access to water and feed, and many farmers lost their livelihoods temporarily. This is where the role of agricultural and livestock insurance is tested—although in reality, the penetration of this product is still limited in the affected areas.
- Land & livestock damage: Ash covered farmland and livestock; some farms had to be evacuated.
- Low cost micro financing scheme: Although there are agricultural microinsurance programs in Indonesia, penetration is still low and needs acceleration to cover volcanic disasters.
- Moment of improvement: This eruption emphasizes the importance of developing small insurance products that can protect farmers & ranchers from natural disasters.
The eruption of Mount Lewotobi Laki-Laki on June 17, 2025 was not the first eruption to hit Indonesia, considering that our country is located on the Pacific Ring of Fire which is prone to volcanic activity. However, the scale and impact of this eruption still provide a strong warning and important momentum in building public awareness of the importance of comprehensive insurance protection throughout the archipelago. So far, the penetration of insurance products in the country has been concentrated in urban areas and certain groups, while inland areas and disaster-prone areas such as East Flores have relatively minimal access to risk protection products.
This major eruption highlights that the risk of natural disasters knows no boundaries or socioeconomic status, and that people in rural areas and small businesses alike are feeling the impacts in real terms—from property damage, transportation disruptions, to the threat of losing their livelihoods. This situation demands insurance solutions that are not only exclusive to the premium segment, but also affordable and easily accessible to all levels of society, including those living far from city centers.
The widespread impact of the eruption of Mount Lewotobi also became a call for the insurance industry to be more aggressive in developing innovative products and increasing risk education so that the benefits of insurance protection can be felt evenly. Thus, this disaster paved the way for increasing collective awareness that insurance is a vital tool for building resilience and sustainability of life in disaster-prone Indonesia.
The eruption of Mount Lewotobi Laki-Laki on June 17, 2025, reaffirmed that natural disasters are a real risk that cannot be ignored by business actors or the wider community. The major impacts caused, ranging from property damage, vehicle disruptions, to flight cancellations and delays, show how complex the challenges that the insurance industry must face in Indonesia are. The high risk of geological disasters requires insurance companies and customers to be more vigilant in managing their risk portfolios.
As the frequency and intensity of disasters increases, awareness of the importance of insurance protection must be spread to remote areas that have previously been less accessible. There needs to be innovation in insurance products that are inclusive, easily accessible, and tailored to local risk characteristics. In addition, risk education and socialization of insurance benefits must be a priority so that the public and business actors understand the vital role of insurance as a financial buffer when a crisis strikes.
We also pray that all communities, business people, and families affected by this eruption are given strength, fortitude, and can immediately fix and restore their living conditions. May aid and solidarity come quickly to ease their burden.
For business people, companies, or individuals who want to strengthen their protection against natural disasters and business risks, consulting with an experienced insurance broker is very important. This is where the strategic role of L&G Insurance Brokers comes in as your trusted partner. We are ready to help design the right, complete, and efficient insurance solutions according to your specific business and risk needs. With an extensive network and deep understanding of risks in Indonesia, L&G Insurance Brokers accompanies you in managing disaster risks so that your business remains resilient and sustainable.
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