General Insurance Association Spots Three Issues Preventing Insurtech

The insurance players represented by Indonesia's General Insurance Association (AAUI) spots three central issues that stalling the innovation for insurtech (insurance technology) in Indonesia. It's considered as the most crucial that needs coordination from several parties to make it work.

Christian Winandi, AAUI's Vice President for International Relation Division, described the three issues of the physical document provision, no validity regarding digital signatures for KYC, and stamp usage.

"The three issues are usually the controversy between legal people of insurance and marketing. OJK is actually aware of this and they're still reviewing due to a large number of parties to be involved. For example, stamp usage cases should be the Ministry of Finance's duty."

In his opinion, the use of physical documents in every purchase of insurance policy doesn't harmonize with the current technology development. In fact, around 50%-60% of 82 AAUI members are heading to insurtech, starting from distribution development through the digital channel.

Currently, some players have developed some simple digital actions, such as using social media and refreshing website to attract potential policyholders.

"If this is the case, they need to solve the regulations which still in the way. insurtech becomes an interesting opportunity for insurance penetration to keep increasing."

According to Indonesia's Insurance Council (DAI), only 1.7% of 260 million people have insurance by 2015. That despite the increase in marketing through the digital channel such as application and email by 110% during 2013-2016.

In other words, insurtech is something that is very compelling to be explored by conventional insurance players. Moreover, this is the right way to attract new policyholder from millennials.

"I guarantee, in five years, insurance will go (market the product) online," Dony Oskaria, CT Corp's CEO, said in the session.

– Original article is in Indonesian, translated by Kristin Siagian