Indonesian Life Updates

Insurance agents still contribute the greater part of the premium incomes of local insurance companies despite the increase in the use of banking channels, or bancassurance, to net new policyholders, according to the Indonesian Life Insurance Association (AAJI) AAJI chairman Hendrisman Rahim said agents played the largest role in winning customers, followed by bancassurance and various channels such as telemarketing.

Agents contributed almost 50 percent of last year’s Rp 121 trillion [US$8.85 billion] of life insurance premiums,” he said, adding that his body aimed to have 500,000 agents by this year-end and 1 million agents by 2020.

As many as 454,706 licensed life insurance agents were recorded as of June, a 27.46 percent increase from the 356,731 agents recorded in 2013. The annual average growth since 2013 reached 17 percent, according to the association’s data.AAJI acting executive director Togar Pasaribu revealed that the contribution by agents was closely followed by bancassurance at around 48 percent while the remainder came from other sources, including telemarketing.

“However, I doubt that online marketing will work for Indonesian customers any time soon because currently they prefer to have face-to-face briefings prior to deciding to buy an insurance product,” he said. Togar went on to say that online marketing would work only if Indonesian customers were fully literate in insurance terms.