AAJI chairman Hendrisman Rahim said, the role of agents is still necessary because the people of Indonesia still need face to face purchases of insurance products, reports Kontan.
According to AAJI, the number of licensed agents increased 4.9% to 540,058 people in the first quarter of this year.
Mr Hendrisman said that the bancassurance channel will grow faster than the agency channel because the bancassurance sales process is easier compared to sales through agents who have to visit one home to another.
"In remote parts of the country, insurance is a product that is sold, not purchased. For at least the next five years, there will still be a need for agents," he said at an insurance conference earlier this month.
The Indonesian Life Insurance Association (AAJI) has stated that with the population of Indonesia totalling 250 million, the ideal number of life insurance agents required to serve a market of this size is one million.
However, AAJI says that at the end of March 2017, the number of agents stood at 560,000, short of a target of 650,000 agents by the end of 2016.
AAJI General Chairman Hendrisman Rahim says that while the use of digital technology in the insurance industry has affected the functions of insurance agents, it will not undermine the need for agents.
According to Mr Hendrisman, there are some things that machines cannot do. One is building a rapport with prospective policyholders because life insurance products are products related to the human condition.
However, he admits that digital technology has helped to increase insurance penetration. With the development of technology, marketing insurance products can be easier, as well as more effective and efficient.
Data from the AAJI show that total life premium income in 2017 increased by 17.2% to IDR195.72 trillion (US$13.7 billion) compared to 2016. Growth was driven by higher public awareness of insurance and the incessant efforts of life insurers in getting closer to customers.
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