Indonesia needs a tech boost for insurance penetration!

June 20, 2024
1 min read

TLDR:

Indonesia’s insurance industry is growing, but there are challenges with low insurance penetration. The country has a penetration rate of 1.4% compared to other ASEAN countries. The key barriers to penetration include geographic landscape, asset accumulation, and financial literacy. To address these challenges, insurance companies are adopting technological developments. Allianz, FWD Insurance, and Sompo Insurance agree that technology can help simplify products and enhance distribution channels. AI can assist in assessments and claims, but human interaction remains crucial. Agents are essential for educating customers, especially in a low literacy environment. Overall, technology and agents play a key role in increasing insurance penetration in Indonesia.

When compared to other ASEAN countries, Indonesia has a low insurance penetration rate of 1.4%. Despite growth in Sharia insurance contributions, market share remains small compared to conventional premiums. Challenges to penetration include geographic diversity, financial literacy, and religious debates around insurance products. To address these challenges, insurance companies are leveraging technology to simplify products and enhance distribution. AI can assist in assessments and claims, but human interaction remains crucial. Agents play a vital role in educating customers and building trust. Overall, technology and agents are key to boosting insurance penetration in Indonesia.

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