Indonesia’s Insurance Threats

By : Anton Hermansyah

Indonesia is a potential market for insurance, since It has billions of people and relative high growing economics. But why the insurance doesn’t grow as it expected.

I browse to the net, follow the lecturing, done some discussions with my friends, and here are the reasons that I got :

Religion and Belief

Indonesian society has strong belief and religion, they believe if the disaster get on them, it’s because of their failure or disobeying the God, if you get insured means that you don’t believe on God’s protection, and it’s a taboo to talk about disaster (it would be difficult to explain the insurance to them).

Education

They felt they have educated enough about insurance, and all they know in generally is : “If I don’t have a trouble, I don’t get the money. My life is almost trouble free, why should I get insured? It’s just wasting my money!”

Financial Perspective

Prior to previous reason, they haven’t realize insurance as an investment, “If you want to invest, why don’t you buy a house, land or jewelry?” Those still a good investment methods, but not liquid enough.

Financial Condition

It’s all about the ability and the stability. We must have the ability to buy the policy and stabilty to pay the premiums consistently. I’m not sure about the number, but I think many Indonesians don’t have either the ability, stability or both. As long as I see, the insurance buyers in Indonesia are from the middle up economic level and forth, in fact there are many Indonesian people living below the poverty line.