Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) through its regional flagship program on microinsurance, Regulatory Framework Promotion of Pro-poor Insurance Markets in Asia (RFPI Asia), supports Otoritas Jasa Keuangan (OJK) – the Financial Services Authority of Indonesia, General Insurance Association of Indonesia (AAUI), Life Insurance Association of Indonesia (AAJI), and the Association of Islamic Insurance Indonesia (AASI) in the launch of microtakaful product prototype during the Microinsurance Market Indonesia (Pasar Asuransi Micro Indonesia) held at Indonesia’s third largest city of Bogor, West Java.
OJK, with technical and financial support from GIZ worked in collaboration with industry partners in developing "Si Bijak" (The Wise), the microtakaful product as low as Rp50 thousand-annual-premium that’s simple, easy, and economical and devised to suit the needs and ability low-income communities. Please click here for the content of "Si Bijak" policy.
Indonesia is an archipelagic country comprised of 13,466 islands with 28.07 million Indonesians today living in poverty. This particular segment of the population unfamiliar with insurance will now be reached through microinsurance, and consequently will be educated on policy, agreements, rights, obligations and particularly, insurance companies offering microinsurance.
GIZ-RFPI Asia supported OJK in the development of the Sharia-compliant microtakaful product through market research. Began early this year, the target respondents were among the lower middle class with income up to Rp 2.5 million per month. Based on the market research in the community, respondents were enthusiastic about insurance that covers the cost of specific perils such as accidents, diseases or specific illnesses.
According to OJk, the microinsurance is expected to shift drastically the perceptions of common Indonesians, especially the low-income communities on insurance as generally difficult to understand, difficult to obtain, expensive and entails long process of claims. With Microinsurance, the distance between the community and insurance industry is now abridged. There’s anticipation that people’s views on microinsurance will change into positive direction with increase in number of microinsurance buyers. For further information on the mechanisms, please click here on the OJK presentation.
About 26 insurance companies participated in the process of development of Si Bijak and are expected to market microinsurance products such as life insurance sharia for risk of death and funeral benefits. Meanwhile, Islamic commercial insurance will focus on micro insurance product pm personal accident protection and the risk of disruption to the place of business or residence. OJK is expected to do a talk show to further promote microinsurance.
Present at the marketplace were MFIs, cooperatives, communities, and BMT from various regions in Indonesia.