Member Country


General Background

Indonesia was one of the six countries that signed the MEFIN Declaration of May 2013 (also known as Cebu Declaration) and signified support to the promotion of inclusive insurance as a strategy for poverty reduction in the region. In January 2016, Indonesia renewed its commitment to the MEFIN Network, which was then formalized as a regional platform for peer-to-peer exchange of knowledge and experiences in inclusive insurance.

Insurance in Indonesia

In recent years, the Indonesian insurance market has attracted significant interest from international investors, both in terms of its M&A and bancassurance opportunities. While it is still a relatively small market regarding the overall size, it is forecasted to grow rapidly, driven by an expanding middle class and the currently low penetration rates.

Country background

With more than 17,000 islands, Indonesia is known to be the largest island country in the world. The estimated population of 267 million people it is the world's 4th most populous country, as well as the most populous Muslim-majority country. Indonesia is a founding member of the Association of Southeast Asian Nations (ASEAN) and a member of the G-20 major economies and is classified as a newly industrialized country. Its economy is the world's 16th largest by nominal GDP and the 7th largest by GDP at PPP. Indonesia's Gini ratio, the coefficient that measures the inequality among income distribution, lies at 39.0, while the Human Development Index accounts to 0.707 and ranks 111th.

Microinsurance in Indonesia

In October 2013, the Indonesian Supervisory Authority (OJK), jointly with the insurance associations, launched the grand design for the development of Indonesia’s Microinsurance market. This grand design defines microinsurance in terms of its scope, limits, and eligible market participants. It encourages innovation in product design and distribution. It elaborates the value chain of microinsurance delivery in the concept of SMES, i.e., microinsurance should be Sederhana (Simple), Mudah (Easy), Ekonomis (Affordable), and Segera (Fast).

The Indonesian Financial Services Authority (OJK) reported an impressive increase from 8.8 million policies in 2014 to 21.8 million in 2016 in Indonesia as a result of multi-stakeholder engagement. Best practices made by GIZ RFPI in the Philippines are currently being implemented in Indonesia.

On September 2016, Indonesia President Widodo issued Presidential Regulation No. 82/2016 which effectively institutionalized the National Strategy of Financial Inclusion (SNKI). The SNKI serves as policy guidelines for ministries, government agencies, and other relevant stakeholders toward achieving the government's financial literacy target.

Insurance Market

From 1 January 2013, Otoritas Jasa Keuangan (OJK) assumed the role of industry regulator from Bapepam-LK. The change was driven by the desire to create an independent 'super-regulator' to supervise the banking and insurance sectors of the country. Increased efficiency within the OJK will hopefully attract further foreign investments to the financial sector.


The national survey on financial literacy on the first semester of 2013 with 8,000 respondents from 20 provinces suggest that those who are insurance literate and buy insurance products is only 17.84%, while around 39.8% is not literate at all. This condition is persistent due to various reasons such as lack of education, lack of awareness on insurance, high distribution cost to the remote islands, inaccessibility to financial institutions, trapped to individual money lenders, the habit of the low-income sector to always look for an instant result, and the misconception that bad things happen in human life due to God's will that have to be accepted.

Climate Risk Insurance

Indonesia experienced up to 3622 natural disasters in 2019; most of them were floods and tsunamis caused by earthquakes. The RFPI Asia Ill program decided to introduce a climate risk insurance product into the country in 2019. New implementation plans are currently being developed by GIZ RFPI Asia Ill, based on the experiences made in the Philippines. The program will be ongoing until the end of 2021.

Additional Information

 Country Brief - Indonesia