Indonesia Life Insurance Update - 2025

Indonesia Life Insurance industry booked total income of $6.54b (Rp109t) in the first half of 2025, up 3.6% from a year earlier, according to the Indonesian Life Insurance Association (AAJI).

The number of people insured rose 8.8% to 123.7 million, whilst industry assets grew 2.2% to $37.83b (Rp630.53t). Investment returns improved sharply to $1b (Rp16.68t), compared with $720m (Rp12.05t) in the same period last year.

Premium income was mixed. Weighted premiums rose to Rp58.55t from Rp56.37t, driven by growth in traditional policies, which climbed 6.5% to Rp55.20t. 

Unit-linked products fell 11.7% to Rp32.40t. Regular premiums increased 4.8%, whilst single premiums dropped 9.6%. Sharia-based business rose 8.2% to Rp11.99t.

Claims and benefits paid fell to $4.35b (Rp72.47t), down from $4.66b (Rp77.67t) a year earlier. 

This was mainly due to lower surrenders, which dropped to Rp34.40t from Rp37.58t. Health claims, however, grew strongly by 3.2% to $730m (Rp12.20t), benefiting 5 million people.

Group insurance continued to expand, with covered lives rising to 102.07 million from 92.01 million last year. The total sum assured reached $436.20b (Rp7,270t), up from $402.48b (Rp6,708t).

Who Is Bai Fangli?

In 1987, at the age of 75, Bai Fangli came back to his hometown planning to retire from his backbreaking job but he saw children working on the fields because they were too poor to afford school fees.

Bai had compassion for this children and he then decided to forfeit his retirement and return to Tainjin to work as a rickshaw puller. He got an accommodation close to the railway.

Bai worked hard to support the children in his hometown. He would wait 24 hours a day, eat simple food and wore second hand discarded clothes. All this was done in order to pay the school fees of children who could not afford education.

By the time he had reached 90 years in 2011, he had donated 350,000 yuan to support more than 300 students. No wonder when he drove his Rickshaw to Tianjin YaoHua Middle School, to deliver his last installment of money and announced his retirement, both teachers and students were moved to tears.

Bai Fangli died at the age of 93 but his legacy has never been forgotten. He is remembered in China as a virtuous man who worked hard to provide education in his society

Age is no barrier to making an impact. Love and compassion is the greatest motivation to change. So be an inspiration; give light to others.

Not Everyone Needs Life Insurance

Who needs life insurance?

Not everyone needs life insurance. However, it’s highly recommended for anyone with a family to support, as in the case of my family member. People with sizeable loans should also consider purchasing coverage. For example, a single colleague of mine got life insurance when he financed a new home. He didn’t want his extended family to worry about making mortgage payments or selling the house. It’s all about emotional security.

One of the upsides of today’s insurance market is that it’s relatively easy to get a policy. Waiting periods and medical exams aren’t as common as they once were. There are also a variety of options that can be tailored to your specific needs.

What type of insurance should you get?

There are two basic types of life insurance: whole and term. Whole life, or permanent insurance, is a policy that provides insurance coverage as well as an investment component—a portion of your payment creates cash value that grows over time and can be borrowed against or used as an investment tool. This additional aspect means whole life has a higher cost than term life insurance, which makes whole life less popular. The trade-off for higher prices is a longer duration. There is no end date as long as you make your payments.

The more popular coverage option is term life insurance. It’s simpler and easier to understand since it’s purely insurance. With term life insurance, you receive coverage for a set number of years—typically, 10, 20 or 30 years. There isn’t an investment component, so your payments are lower than they would be with whole life. The policy can be renewed at the end of the term, with the caveat that payments increase as you age. If you choose term life insurance, I recommend setting up an alternative retirement income source since you’ll miss out on the investment component of whole life insurance.

How much coverage do you need?

Think of life insurance in needs-based terms. Get enough coverage to replace your current lifestyle, not to enhance it. When purchasing a policy, consider your financial obligations, your dependents’ needs and the amount of time you need coverage. Borrowers should have enough coverage to pay off their debt, while wage earners should have income replacement of 10 times to 12 times their current annual salary.

Easy enough, but how do you calculate coverage for a stay-at-home parent? My wife and I had this conversation not long ago. One evening, we were discussing the future and my wife asked if she should have life insurance. “Of course,” I answered, and within a few days I’d secured a policy. This led to her next question, “How did you determine the amount?” I explained that I calculated the cost of child care and the value of her other family contributions for the next five years. For us, five years would put us beyond needing child care. Your calculation may differ, but the idea is to have sufficient coverage to maintain your lifestyle.

When should you cancel your policy?

If you have whole life insurance, you never need to cancel your policy. It was designed to be lifelong. Term life, as indicated by the name, will expire at the end of the selected term. You’re welcome to renew the policy annually. However, be aware the price goes up as you age. Eventually, it may become too expensive to keep, at which time you should consider cancelling the policy. Just make sure you have sufficient retirement savings in place before you do so.

Accenture Corporate Strategy Embrace AI

Global consulting giant Accenture has laid off more than 11,000 employees across its offices worldwide in the past three months. The company cited slowing corporate demand and the rapid adoption of artificial intelligence (AI) as primary drivers of the workforce reduction. While the restructuring, valued at $865 million, aims to align the company with evolving client needs, it also signals a broader shift in the skills white-collar professionals will need to remain relevant.

Demand For AI - Accenture is “exiting people on a compressed timeline where reskilling is not a viable path for the skills we need.” The statement underscores a growing reality in corporate environments: not all employees can be retrained fast enough to meet the demands of rapidly changing technology. Sweet emphasized that the company will prioritize workforce alignment with client demand for AI-driven solutions, a move that may result in further exits in the months ahead.

Headcount Down - At the end of August 2025, Accenture’s global headcount stood at 779,000, down from 791,000 three months earlier. The layoffs, part of a continuing process expected to run until November 2025, reflect both operational restructuring and the financial imperative of managing severance costs. The company projects that the initiative will save over $1 billion, even as it seeks to retain core talent capable of delivering on AI-focused projects.

Upskilling - Alongside workforce reductions, Accenture is investing in upskilling programs focused on agentic AI, a new class of tools designed to automate complex decision-making and operational tasks. Sweet noted that these programs are essential for meeting client expectations as businesses globally seek to reinvent operations with AI. For white-collar professionals, the implication is clear: developing proficiency in emerging AI technologies is no longer optional but increasingly central to career sustainability.

Critical Lessons - While the Accenture layoffs are significant, they offer critical lessons for professionals navigating a transforming work environment:

a: Adaptability is essential: In a time where technological adoption accelerates faster than traditional reskilling programs, the ability to pivot and acquire new capabilities quickly is a key differentiator.

b: Specialization in emerging skills matters: Knowledge of AI, particularly agentic AI, is becoming a strategic asset. Professionals who cultivate these competencies are better positioned to align with organizational priorities.

c: Proactive career management: Waiting for corporate reskilling programs may be insufficient. Employees must anticipate shifts in demand and invest in continuous learning independently.

d: Financial awareness is part of professional literacy: Understanding organizational restructuring, severance implications, and the economic drivers behind workforce decisions can help professionals navigate transitions more strategically.

e: Resilience in uncertainty: Even in high-performing firms reporting revenue growth, such as Accenture, which posted a 7% year-on-year increase to $17.6 billion in the June-August quarter of fiscal 2025, job security is not guaranteed, making emotional resilience and strategic foresight critical for sustaining a long-term career.

AI reshaping Corporate Structure - Accenture’s approach demonstrates a broader trend: the integration of AI into corporate strategy is reshaping not only business models but also the expectations placed on white-collar professionals. Those who embrace continuous learning, anticipate technological shifts, and develop highly relevant skills will find themselves better positioned in a rapidly evolving job market.

The Accenture story serves as a reminder that career growth is increasingly tied to adaptability, specialized expertise, and proactive planning. For white-collar professionals, the lesson is unambiguous: the future belongs to those who prepare for it, not those who wait for it.

Indonesia Health Insurance Co-payment Postponed

The implementation of a 10 percent risk-sharing scheme, aka co-payment, for health insurance customers that will take effect in January 2026 has finally been postponed. Instead, the Financial Services Authority will prepare new regulations by involving participation from stakeholders and through consultation with parliament.

The risk sharing scheme depends on the policies of each insurance company by considering the risk profile and loss ratio that can be negotiated with customers. Even without SEOJK or POJK, every insurance company is free to offer co-payment to customers, if approved, because insurance is an agreement between the two parties, the insured and the insurer, which according to paragraph 1 of article 1338 of the Civil Code applies as a law for the parties who are bound.

Postponement - Previously, the results of the Working Meeting between Commission XI of the DPR and the Chairman of the Board of Commissioners of OJK and Members of the Board of Commissioners of Insurance on Monday (30/6/2025) agreed to postpone the implementation of SEOJK Number 7 of 2025 concerning Health Insurance Products starting January 2025. This SEOJK regulates, among other things, the risk-sharing sch

This decision allows for more public aspirations to be accommodated (meaningful participation). On the other hand, not every OJK policy formulation in the form of POJK and SEOJK should involve the DPR, especially those related to general industrial regulation and supervision.

However, the SEOJK on co-payment is directly related to the interests of consumers in general, especially health insurance customers, so the DPR as a working partner of the OJK needs to be involved. Variable cost co-payments should only be charged when a claim occurs, instead of a fixed cost premium increase every time a health insurance policy is purchased or extended. Basically, co-payments also function as additional premiums when a claim occurs.

In addition, there is also an alternative option for regulators by limiting the scope of coverage guarantees, such as specific diseases, the age of the insured, or only covering outpatient care and excluding inpatient care.

The spirit of SEOJK No. 7/2025, actually weakens and makes consumers of health product insurance the scapegoat. This is considering the reason behind the regulation is intended to reduce fraudulent practices carried out by consumers, over-utility, and high inflation in the health sector.

(1) The alleged fraudulent practices, for example, were not only carried out by consumers, but also involved stakeholders in the health sector. However, only consumers were accused and burdened with a 10 percent co-payment.

(2) The alleged over-utilization by consumers can also be mitigated by making stricter prerequisites, for example, it must be accompanied by detailed health history data through health check results. This indicates that over-utilization occurs due to loose regulations when consumers will become health insurance participants.

(3) Regarding inflation in the health sector, which is said to reach 12.5 percent, it should be the duty and responsibility of regulators, even the government, to intervene. However, consumers should not be used as a shield to lower this high inflation

Insurance Vs Investment

Around year 2000, one of the earliest conversations many had with life insurance agent was about investment-linked insurance plans (ILP). It sounded like a smart insurance product at the time where a policyholder could check two items off insurance list by getting life insurance protection while investing at the same time.

Investment-linked Policy - is a two-in-one deal: part insurance, part investment. Your money covers you and also goes into funds that are supposed to grow your wealth. For many people who lack confidence or are afraid to invest on their own, they tend to count on their ILP to do the work for them, relying on their agent.

Many people's first step into investing comes through ILPs sold by insurers, often by friends or family acting as agents. These products, largely agent-driven and dominated almost 50% of new life insurance business in the first half of 2025.

At first, this may seem practical. However, when the ILP fails to perform well, people often end up regretting their decision, only realising then that their investment returns were not guaranteed.

INVESTMENT RETURNS NOT GUARANTEED
ILP is positioned as a convenient and fuss-free way to invest. Many people make the mistake of assuming that it is a passive investment tool. ILP returns depend on the funds you pick, which can go up or down with the market. And no matter what happens, it is the policyholder, not the insurer, who takes on all the investment risk.

Several readers have discovered that their ILP have resulted in negative or muted returns. For example, an investment of RM60,000 over 10 years resulted in only RM50,000 if the policy is surrendered. 

Many have utilized in a low-cost global exchange-traded fund (ETF) that charges less than 0.05 per cent fees every year.

THE PROBLEM WITH HIGH FEES
Even if your ILP makes money, the fees will eat into your gains. Insurers often bundle sub-funds into different portfolio options, but investing in them through an ILP means paying multiple layers of charges – you are paying fees to fund managers, insurers and commissioned agents.

In the early years, much of your premiums go towards sales commissions, administrative charges and other fees rather than your investments. Even with "welcome bonuses", usually offered by insurers for the initial years to offset this, total fees often add up to 2 per cent or more of your investment each year.

Welcome bonuses may help offset fees in the first few years, but ILPs are meant to be held for decades, which means consumers need to ask whether they are truly willing to pay these fees over decades.

Alternatively - through a brokerage, one could buy some of the same funds directly, or even a lower-cost ETF that is traded on the stock exchange and tracks a similar benchmark such as the Straits Times Index (STI). The STI is Singapore's key stock market benchmark, made up of 30 of the country's biggest listed companies including banks such as DBS, OCBC and telecommunications firm Singtel.

Fees for such ETFs are much lower, at just 0.26 to 0.30 per cent a year.Today, there are far better alternatives than when ILPs first became popular in the 1990s and early 2000s, with some plans now allowing you to start investing with as little as S$100 a month.

One can also buy ready-made funds, such as unit trusts, or even small portions of individual shares, through most brokerages or robo-advisers without needing a big sum of money. 
With these options, ILPs often appear less cost-effective for those willing to learn and take a hands-on approach.

WHEN THINGS DON'T GO AS PLANNED
There is a risk of not being able to pay ILP premium. A job loss or a new baby can quickly turn those premiums into a heavy burden. While some insurers allow "premium holidays" or "premium passes", they often come with conditions, fees and limits. Stop paying and the policy may lapse or eat into whatever cash value that have built up.

On top of that, policyholders can choose only from a limited set of funds offered by the insurer, and most ILPs require a commitment of at least 10 years, with stiff penalties for exiting early. When this happens, the surrender value may be less than the total premiums paid.

In contrast, investing through a brokerage account or robo-adviser gives me the freedom to stop or restart my investments anytime with no penalties or hidden charges.

A SMALL SILVER LINING
ILP offers retail investors a rare opportunity to put their money into select funds otherwise meant for accredited investors only, and at a lower capital outlay. This could appeal to someone specifically seeking such exposure. But for the average consumer, this is rarely the case. Many policyholders don't fully understand how ILPs work or were even mis-sold the product.

Even if disputes are resolved, they may not get all their premiums back, and the opportunity cost of not having invested earlier in cheaper options such as ETFs or robo-advisers can be painful.

Ultimately, the investment risk lies with the policyholder. 

ILPs might suit people who are incapable of investing or want a forced savings mechanism, or who prefer a hands-off approach to investing and don't mind paying extra fees for it.

ILP lack of flexibility and significantly higher costs outweigh the benefits. In a world where better, cheaper and simpler tools exist, it is advisable to keep insurance and investments separate.

Escalating healthcare costs in the private sector are driving more affluent Malaysians, to seek treatment at Hospital Kuala Lumpur (HKL). Many wealthy patients were referred from private medical centres, often after their insurance coverage ran out or when treatment costs became too high.

This is a reality. First, their insurance coverage runs out. Second, treatment costs are simply too high, so they move to HKL. This shift has been evident over the past decade, reflecting both financial pressures and confidence in HKL’s specialists and facilities.

He added that the trend shows that affluent patients also trust HKL’s quality of care and medical expertise. HKL currently houses 417 medical specialists, supported by nearly 900 medical officers and more than 3,800 nurses, treating up to two million patients annually. The public hospital is also equipped with advanced technology, including robotic-assisted surgery in its Urology Department, one of only two such facilities in Malaysia.

HKL gave an assurance that the rising number of T20 and VIP patients would not affect low-income groups, who remain the hospital’s priority. No matter the status of the patient - all will not receive special privileges. Treatment is provided equally to all. 

HKL prioritises low-income groups, it cannot turn away wealthier patients and has first-, second- and third-class wards to accommodate different needs. M40 and T20 patients often sought oncology and radiology services at HKL, which are both highly specialized and costly in private hospitals.

Despite longer waiting times compared to private facilities, he said patients leave HKL with quality treatment, affordable medication and access to expertise that matches or surpasses the private sector.