The threat of terrorism and the political agenda in Indonesia until 2019 will trigger an increase in demand for terrorism insurance, says Mr Robby Loho, chairman of the Indonesian Insurance Industry Development Consortium-Terrorism and Sabotage (KPIAI-TS).
Referring to Sunday's three suicide bombing incidents, he said that the recurrence of terror bombing would increase awareness of insurance, especially among owners of high rise buildings, according to a news report by Tempo. Interest in terrorism and sabotage insurance usually spikes after a terror incident, and falls again soon thereafter.
However, an additional factor is that the country's election agenda this year and next will boost demand for terrorism and sabotage insurance, said Mr Robby, who is also President Director of Maskapai Reasuransi Indonesia (Marein). Local polls to elect 17 governors, 39 mayors and 115 regents across the country are scheduled to be held on 27 June 2018. General elections are set to be held on 17 April 2019 to pick the president, and members of the People's Consultative Assembly who form the legislature.
Mr Robby said that the terrorism and sabotage product has now been expanded to cover also the risk of loss of profit (LoP). "For example, because of a terrorism event, a hotel may be forced to stop operating, LoP insurance will bear the loss due to the closure," he said.
Suicide bombers who were members of one family struck three churches across the provincial capital of Surabaya at around 7am on Sunday, leaving at least 13 dead and over 40 others wounded. The Islamic State group has claimed responsibility for the suicide attacks.