News Life and Health14 Feb 2018

Indonesia:Partnerships key to expanding insurance pie

| 14 Feb 2018

Collaboration with external partners as well as product simplicity are key factors in reaching out to more insurance customers in Indonesia, said panelists at an industry event in Jakarta yesterday.

Insurers need to be on platforms on which Indonesian consumers spend a lot of their time, such as Go-Jek, said Mr Hassan Karim, Director at Zurich Indonesia.

He noted the local general insurance segment is largely focused on commercial lines while three quarters of retail premiums are centred on motor. Considering the low insurance penetration and the vast size of the country, insurers have to focus on creating a viable digital eco-system in order to reach out to more customers.

In this regard, he advocated the need to integrate insurance into various apps and digital touchpoints which consumers interact with on a regular basis, as a means to improving the visibility of insurers. He also cited findings which reveal that 58% of local consumers discover brands through search engines, compared to 50% who cite TV ads and 39% who quote word of mouth.

Meanwhile, Mr Choo Sin Fook, President Director of FWD Indonesia, spoke about the need to introduce greater efficiency and simplicity in insurance processes and products.

He noted that while face-to-face contact remains crucial in closing sales, a lot of other processes can be digitised and made more efficient.

He added that products also have to be made simpler for the benefit of consumers.

In the Indonesian life market where more than 75% of its premiums are generated through unit-linked policies, Mr Choo said local players need to “moderate” their unit-linked product proposition and make it more affordable to more people.

In the past, life insurers have tried to penetrate the middle and lower-income markets by offering cheaper monthly premiums.

Nonetheless, Mr Sendy Filemon, President Director of Futuready Insurance Broker, believes that unit-linked policies in Indonesia tend to be bought by the more affluent consumer segments, which explains the low insurance penetration in the country.

He added the local life market has to change its product offerings in order to be viable to a wider consumer segment.

The event, the Insurance Innovators Indonesia 2018 conference, organised by Marketforce, ends today.

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