The Financial Services Authority (OJK) in Indonesia is promoting the introduction of mandated insurance policies for the public.
Ogi Prastomiyono, the chief executive of insurance, financing institutions, and pension fund supervisor, has stated that this initiative aims to ensure that mandated insurance is in place, particularly for large gatherings that involve a significant number of people, such as football matches.
“There is no insurance for such instances since it's not mandated. As we can see from Kanjuruhan's case, there was no insurance after the investigation," he said in a Tempo report. "With a mandated insurance policy, the tickets could allot Rp50,000 for insurance."
This approach is not limited to public gatherings as OJK intends to encourage similar mandates in other sectors, particularly in transportation. Currently, insurance coverage for passengers is facilitated by Jasa Raharja, but the move towards mandated insurance for vehicle coverage is on the horizon.
Should this initiative be implemented, insurance companies will likely introduce new products or collaborate with other firms to provide the necessary coverage. Prastomiyono said that this approach will boost insurance penetration, offering protection to citizens while also safeguarding companies from potential damages or future risks.
Elsewhere in the country, AM Best has maintained its negative outlook on Indonesia's non-life insurance sector, attributing it to heightened reinsurance credit risk and the potential strain on underwriting margins.
What are your thoughts on this story? Please feel free to share your comments below.
