Insurance industry challenging yet promising

By Aulia R. Sungkar. Originally published in The Jakarta Post on October 18, 2017

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Teddy was very skeptical about having an insurance policy. It wasn’t about the money, as he successfully turned his export business into a profitable venture. “But just like many other Indonesians, we still faced a steep learning curve in dealing with insurance products,” Lani, Teddy’s wife, recalled.

That was in the late 1990s, during the heyday of his business. Later, in the early 2000s,  the business collapsed and the couple, along with their three children, had to deal with all the financial difficulties they had never encountered.  But they were saved!

“My husband’s younger brother had surgery for a cardiovascular disease that could have cost him a fortune, but he managed to recover as his insurance policy covered all the expenses. Seeing the benefit that he reaped from having the policy urged us to search for the right insurance products for us. We then decided to purchase one that functions as both a savings [account]  and protection. And I felt so lucky that at our ages, our applications were approved,” Lani said. “That was in 2002. My husband was 59 and I was 52.”

Despite facing the financial hardship due to the closing of his business, Teddy managed to allocate some funds for the insurance coverage. Only less than a year after having the coverage, he suffered his first stroke, followed by the second one in a matter of months. “I couldn’t imagine what would happen to us. Yes, the insurance covered all the medical expenses for both inpatient and outpatient [treatment], even after my husband got the second stroke,” Lani recalled.

Now, the 67-year-old Lani is taking care of her 74-year-old husband who is suffering aging associated complex diseases, including prostate, type 2 diabetes and arthritis. She has also built some savings from their life insurance policies, and has used some of the funds to build boarding rooms at her house. “Fortunately, my husband’s insurance policy still covers his medical expenses. For our bread and butter, I’m now operating 15 boarding rooms, which I first started with only three rooms about ten years ago,” she asserted.

Untapped market

Teddy and Lani’s story is just one of the many who have reaped the benefits that a life insurance policy has to offer. With more insurance players in the industry, more varied products are now on the market to tailor different needs of individuals seeking an investment instrument that can generate savings and protect their future loss.

The good news is that the untapped market for life insurance products in Indonesia is still huge. “Due to the rapid increase of the middle and affluent classes in the country, I believe the industry will grow significantly. The challenge, nevertheless, is the lack of awareness toward the importance of having insurance protection. Therefore, it is important that we, as insurers, educate the market. We can do this by, for example, holding a series of insurance educational activities to raise public awareness,” explained Rosmaylinda Nasution, director, chief of distribution and chief of communication at Zurich Topas Life.

Nevertheless, she added that the constant changes of various sectors in the world economies along with the current technology advancement has provided not only more opportunities but also some challenges, which have affected our industry as well.

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“I believe that as insurers, we need to keep up with the latest update in the economic trends and consumer behavior. This means we should adopt the changes in our product and technology innovation, branding activity, distribution channels, as well as continuously maintain our relationship with customers,” Rosmaylinda explained.

One important factor that determines the benefits of an insurance company is its customer centricity value. “This means that we are willing to go the extra mile to serve the most favorable solutions for our customers’ needs,” she said, adding that in today’s digital era, delivering top quality service means putting technology advancement at the forefront of the industry. “Our mobile applications, TemanBaik and Z-Pro, are the examples of our successful digital innovations.”

Insurance aggregator

One of the  features related to the increasing trend of insurance technology (insurtech) is a marketplace that simplifies the purchase of insurance products., which is run under PT Pasar Polis Indonesia, is one of the pioneers for insurtech in Indonesia. Also called an insurance aggregator, an insurtech company provides a digital platform for various insurance products within a click of a button.

“With product innovations tailored to the needs and economic capabilities of Indonesian customers, we have established our presence to serve all types of market segments that may be currently unreachable financially, physically and geographically by other parties,” said Elia Wijaya, chief marketing officer of PT Pasar Polis Indonesia.

Indonesia is populated by more than 250 million people, “however, as of 2016, the number of insured individuals stands at below 3 percent [of the population]. This means that the market is still promising,” she added.

Currently, Pasar Polis is also working together with the Workers Social Security Agency (BPJS Ketenagakerjaan) to provide e-registrations for workers. “I’d say that the partnership is a breakthrough that will allow workers to register in just three minutes without the need to line up at the [agency’s] offices,” she said.