Only 1.4 Percent, LPS Says Indonesian Insurance Implementation Is Still Low

Photo Ketut: Executive Director of Surveillance, Data, and Insurance Examination of LPS Suwandi (Doc. LPS)

The Deposit Insurance Corporation (LPS) revealed that the insurance industry's penetration rate in Indonesia was still low.

Even when compared to countries in Southeast Asia, Indonesia's position is still below the Philippines, Malaysia, Thailand and Singapore.

LPS Executive Director of Surveillance, Data and Insurance Examination Suwandi said, until the end of 2024, Indonesia's insurance industry penetration was recorded at only 1.40 percent.

"Relatively, it hasn't changed much since even before the Asian financial crisis hit," said Suwandi in Bandung, Saturday, December 6.

Meanwhile, the Philippines at the end of 2024 reached 1.80 percent, Malaysia 3.80 percent, Thailand 5.10 percent and Singapore 7.40 percent. As for developed countries, generally at the level of 9-10 percent.

Suwandi said, there were several variables that hindered the penetration rate. Among them are the rise of a number of cases that have plagued insurance companies that have eroded public trust in insurance companies, to the insurance industry as a whole.

"Cases involving insurance companies are indeed quite suppressing the penetration of the insurance industry. From 2016 to 2025, there have been 19 insurance companies whose business licenses have been revoked by the OJK," he continued.

For the record, several insurance companies whose business licenses were revoked or experienced major problems in Indonesia include Jiwasraya Insurance, AJB Bumiputera 1912, Wanaartha Life Insurance, Kresna Life Insurance, and PT Berdikari Insurance whose license was revoked in January 2025.

The companies were closed due to solvency problems and failed to pay claims, while Jiwasraya was officially closed after years of problems.