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About the country

Population: 263 million (2017)
Population below poverty line: 11.3% (2014)
GDP per capita: $3,895 (2017)
Informal sector: 72.5% mainly in services, manufacturing and trade (2013)
Initial market view:

The insurance market in Indonesia has grown in recent years. Insurance penetration was as of 2014 hovering at around 2% as a ratio of gross premium to GDP. Indonesia has registered impressive economic and population growth, and as many as 80 million additional Indonesians could join the consuming class by 2030. The insurance industry of Indonesia has experienced significant regulatory change, which affected foreign ownership and shareholding thresholds. Life insurance is by far the largest segment in Indonesia, accounting for nearly half of total insurance premium income. The microinsurance market offers a lot of potential, although it is currently focussed on microcredit life. The microinsurance sector in Indonesia did register an impressive growth in the last couple of years in terms of outreach. Regionally it is one of the more vibrant microinsurance sectors with compounded growth rates of over 100% between 2010 and 2012. Indonesian microinsurance providers have been experimenting with the integration of mobile phones into their processes. The Indonesian government has, as of 2014, furthermore been working on mandatory universal healthcare coverage, which aims to enrol 250 million people by 2019. 

Our engagement


The ILO’s Impact Insurance Facility has actively participated in the development of the insurance market in Indonesia. Since the start of the Facility in 2008, it has been involved in a number of projects with regulated insurance companies.

Our initiatives: Capacity building

Our capacity building activities aim to translate knowledge into practical solutions in order to develop the skills of providers, distributors and other key players. In Indonesia, the Facility has been involved in training activities in collaboration with the ASEAN Insurance Council and the Insurance Institute for Asia and the Pacific.

Our initiatives: Research and innovation

The Facility partners with a number of leading practitioners in Indonesia to design innovative strategies and game-changing solutions.

With AXA, the Facility will design and deliver impact insurance innovation to benefit low-income workers, especially women and migrants in Indonesia. The key output of this collaboration will be critical insights into the design and delivery of insurance products for excluded populations, especially women and migrants, which will be widely shared with the insurance and development communities.

With Allianz Life Indonesia, the Facility supported the development of its life insurance endowment product. The product was developed as a way to meet the demand of the low-income people for affordable health and education through enhanced microcredit life products.


Consumer education and client insights

It is possible to sell voluntary products to borrowers once they’ve had some experience with mandatory credit life. Results from an experiment in Indonesia show that it is possible for microfinance institutions to sell credit-life products, following on mandatory products.

Market development

Innovations in microinsurance can also be applied to an insurer’s commercial business. The experience of an insurance company in Indonesia showed that the results of a microinsurance pilot can be used to develop and to test innovative processes, systems, and protocols for application to the insurance company’s core business.