Indonesia’s personal accident and health (PA&H) insurance market is projected to exceed IDR63.8 trillion (US$4 billion) in gross written premiums (GWP) by 2029, according to data from analytics firm GlobalData.
The segment is expected to expand at a compound annual growth rate (CAGR) of 13.4% from 2025, when the GWP is estimated to reach IDR38.6 trillion (US$2.4 billion).
GlobalData’s insurance market projections indicate that the PA&H segment will represent a growing share of the overall insurance industry. Its contribution is forecast to increase from 13.6% of total GWP in 2025 to 16.7% by 2029.
The 2025 growth alone is expected to reach 14.2%, supported by rising demand for private health coverage and upward premium adjustments.
“The Indonesian PA&H insurance industry has witnessed double-digit growth since 2022 and is anticipated to sustain this upward trend over the next five years,” said Manogna Vangari, insurance analyst at GlobalData.
The increasing cost of medical care is placing additional pressure on insurers. Data from the Indonesian Life Insurance Association suggests that double-digit medical inflation and higher treatment costs could limit affordability for many consumers in the coming years. Insurers are responding by raising premiums to sustain coverage levels.
“This robust expansion is driven by increased health and financial awareness, which has stimulated demand for health insurance products. Furthermore, adjustments in premium prices to counteract inflation, coupled with a revival in the tourism industry, are expected to further bolster the growth of PA&H insurance,” Vangari said.
Insurers are also shifting their distribution and risk management focus. Instead of targeting large corporate accounts, which involve more complex underwriting, companies are concentrating on small to mid-sized enterprises.
Cost control measures are being implemented in response to reported instances of overtreatment, prompting some insurers to move away from cashless benefits and adopt reimbursement-based models.
Gross claims in the PA&H segment are also expected to rise, with GlobalData forecasting a CAGR of 10.9% between 2025 and 2029. Total claims are projected to grow from IDR8.6 trillion (US$535.9 million) in 2025 to IDR13.1 trillion (US$816.3 million) by the end of the forecast period.
Vangari said medical inflation, particularly the rising cost of imported pharmaceutical components and medical devices, is contributing to higher claims.
“The rising claims ratio trend is partially attributable to medical inflation in the country, which is mainly driven by soaring expenses for pharmaceutical ingredients and medical devices. Additionally, the devaluation of the local currency worsens pricing challenges, as most pharmaceutical raw materials and medical devices are sourced from abroad,” she said.
In response to rising claims and cost pressures, the Financial Services Authority (OJK), in coordination with the government, is drafting a new Circular Letter (RSEOJK) aimed at harmonising benefits between insurance providers and Indonesia’s public health system. The proposed framework includes mandatory co-payments of at least 10% for outpatient services. The policy is intended to limit unnecessary use of medical services and reduce insurers’ exposure to high claims ratios.
The growth of Indonesia’s tourism sector is another factor influencing the PA&H market.
According to the Central Statistics Agency, international tourist arrivals rose to 13.9 million in 2024, marking a five-year high. The increase in inbound travel is contributing to the demand for accident and short-term health insurance coverage.
Vangari said the PA&H segment continues to face challenges, but developments in digital platforms and product innovation are shaping its future.
“Insurers are progressively adopting technology to create more flexible products that meet market needs. Furthermore, the implementation of stricter regulations is anticipated to reinforce the industry’s stability,” she said.
