Daniel Slotta
Research expert covering Greater China
Insurance industry in Indonesia - statistics & facts
The Indonesian insurance market, which has grown significantly since its recovery from the 1998 economic crisis, has proved its resilience over the past years. Despite a slight slowdown in growth, the sector continues to make a steady contribution to GDP. Regulated by the Financial Services Authority (OJK), the market comprises 150 insurers, 78 of which specialize in non-life insurance, 59 in life insurance, and nine in reinsurance. However, Indonesia's financial literacy rate of less than 70 percent prevents greater penetration of the various types of insurance.
The implementation of the Financial Sector Omnibus Law (PPSK), enacted in 2023, was a pivotal step in driving the sector forward, addressing capital agreements, political guarantee programs, and digitalization. Despite the progress made, low financial inclusion and persistent public mistrust are hindering the industry's development. While the level of financial literacy on insurance in Indonesia has increased over the past years, a significant gap remains between literacy and actual financial inclusion. Initiatives by OJK, including the implementation of PSAK 74 and the additional mandates given to the Deposit Insurance Corporation, are aimed at improving financial reporting transparency, strengthening confidence, and providing a safety net for policyholders.
The JKN-KIS (Indonesian health card) program has made significant progress in improving healthcare accessibility, particularly for vulnerable and low-income groups. Introduced in 2014, the program aims to cover the entire population, and has reached more than 267 million beneficiaries nationwide in 2023. Despite these positive developments, challenges remain, notably the obstacles faced by Indonesia's rural and eastern populations due to insufficient infrastructure and healthcare providers.
In the coming years, it is necessary to build more trust and inclusion to sustain the growth of Indonesia’s insurance industry.
Indonesia's insurance landscape
The insurance industry presents a dynamic landscape and strong potential for development, considering the rising income levels and the growing middle class. Indeed, the country still has an insurance penetration rate of less than three percent, lower than that of neighboring ASEAN countries. The life insurance sector is led by international players such as Manulife Indonesia and Prudential Indonesia. In 2024, total life insurance premium income reached 156 trillion Indonesian rupiah, far surpassing the non-life segment. Property, credit, and motor vehicle premiums dominated the non-life insurance market.The implementation of the Financial Sector Omnibus Law (PPSK), enacted in 2023, was a pivotal step in driving the sector forward, addressing capital agreements, political guarantee programs, and digitalization. Despite the progress made, low financial inclusion and persistent public mistrust are hindering the industry's development. While the level of financial literacy on insurance in Indonesia has increased over the past years, a significant gap remains between literacy and actual financial inclusion. Initiatives by OJK, including the implementation of PSAK 74 and the additional mandates given to the Deposit Insurance Corporation, are aimed at improving financial reporting transparency, strengthening confidence, and providing a safety net for policyholders.
Health insurance developments
Indonesia's health insurance system plays a crucial role in meeting the population's diverse healthcare needs. The national health insurance program (BPJS Kesehatan) is at the forefront of public initiatives to provide affordable coverage. In addition, private insurers are responding to the needs of a growing middle class seeking improved benefits and services. Nevertheless, private health insurance retains relatively low ownership rates.The JKN-KIS (Indonesian health card) program has made significant progress in improving healthcare accessibility, particularly for vulnerable and low-income groups. Introduced in 2014, the program aims to cover the entire population, and has reached more than 267 million beneficiaries nationwide in 2023. Despite these positive developments, challenges remain, notably the obstacles faced by Indonesia's rural and eastern populations due to insufficient infrastructure and healthcare providers.
In the coming years, it is necessary to build more trust and inclusion to sustain the growth of Indonesia’s insurance industry.
