Roadmap For The Insurance Industry To Strengthen Indonesia's Economy

Chairman of the OJK Board of Commissioners Mahendra Siregar during the launch of the 2023-2027 Insurance Industry Development Roadmap. (Photo: Aris Nurjani/VOI)

JAKARTA - The Financial Services Authority (OJK) collaborated with the insurance association to launch the 2023-2027 Insurance Sector Strengthening and Development Roadmap in strengthening the financial sector, especially the development of a healthier, more efficient, quality, reliable, and inclusive insurance industry going forward.

Expert Staff for Financial Services and Capital Market of the Ministry of Finance Arief Wibisono added that the financial sector has an important role in supporting the Indonesian economy.

As an intermediary, a strong financial sector will contribute positively to the country's economy.

According to Arief, the insurance industry has a strategic position in the banking sector and can effectively absorb and mitigate future risks.

"However, insurance penetration in Indonesia is still lagging behind compared to other ASEAN countries such as Singapore, Malaysia and Thailand," explained Arief, Monday, October 23.

Arief said that the low level of insurance penetration in Indonesia was caused by several challenges, including the lack of trust from consumers.

To overcome this, Arief said, it is necessary to attend a financial task force that can optimize insurance governance and provide better protection to consumers.

"It is hoped that the efforts made by the OJK and other related parties can increase public confidence in insurance and make a greater contribution to the national economy of the community," said Arief.

Chairman of the Indonesian Insurance Council (DAI) Rudy Kamdani said all stakeholders of the national insurance industry, from OJK to 12 associations under the Indonesian Insurance Council, would collaborate and take strategic steps to realize a common vision to strengthen consumer and community protection.

"As well as supporting economic growth through market deepening, increasing inclusion and financial stability," he explained

Rudy emphasized the importance of innovation and management of the insurance industry which is healthy, efficient and with integrity, in strengthening consumer protection in order to improve the quality of marketers, business processes, and provide trust to the community.

One of the main problems is the lack of public understanding of insurance benefits. According to the survey, many people do not have insurance because they do not understand the benefits," said Rudy

Therefore, Rudy said, literacy about insurance needs to be increased so that the public can realize the importance of insurance in protecting themselves and their families from unexpected risks.

Rudy said, in an effort to build an integrated and quality insurance industry, collaboration between industry players, associations, governments, and related parties is key in encouraging sustainable insurance industry growth.

On the other hand, Rudy said that the public also needs to understand the benefits of protection provided by insurance and understand the products they will buy as well as the terms and conditions.

"By improving literacy, improving innovation, and improving the governance of insurance companies, it is hoped that insurance penetration in Indonesia can increase and the Indonesian people can understand the importance of having insurance in protecting themselves and their property," he said.