Insurance

Indonesia’s insurance sector holds considerable potential, given the country’s current low penetration rate, large domestic population and growing middle class. While the industry suffered a setback in early 2020 when allegations of a “pump-and-dump” scheme involving investment funds managed by two state-owned insurers came to light, the strong and immediate regulatory response should restore confidence in the market. It is also an opportunity for other insurers that have demonstrated sound management of customer premium to differentiate themselves. Meanwhile, rapid advancements in the country’s digital economy are helping to increase financial literacy and provide new distribution channels to reach Indonesia’s fast-growing consumer class.