Indonesian Insurance Research Articles

Influence of region, experience, and subjective norm on the use of e-learning: Lesson from the insurance industry in Indonesia

The effectiveness and efficiency of e-learning system in industry significantly depend on users’ acceptance and adoption. This is specifically determined by external and internal factors represented by subjective norms (SN) and experience (XP), both believed to affect users’ perceived usefulness (PU) and perceived ease of use (PEOU). Users’ acceptance of e-learning system is influenced by the immensity of region, often hampered by inadequate infrastructure support. Therefore, this study aimed to investigate behavioral intention to use e-learning in the Indonesian insurance industry by applying Technology Acceptance Model (TAM). To achieve this objective, Jabotabek and Non-Jabotabek regions were used as moderating variables in all related hypotheses. An online survey was conducted to obtain data from 800 respondents who were Indonesian insurance industry employees. Subsequently, Structural Equation Model (SEM) was used to evaluate the hypotheses, and Multi-Group Analysis (MGA) to examine the role of region. The results showed that out of the seven hypotheses tested, only one was rejected. Furthermore, XP had no significant effect on PU, and the most significant correlation was found between PEOU and PU. In each relationship path model, the role of region (Jabodetabek and Non Jabodetabek) had no significant differences. These results were expected to provide valuable insights into the components of e-learning acceptability for the development of a user-friendly system in the insurance industry.

Optimization of Insurance Brokerage Institutions in Realizing the Trust of the Indonesian Community

Public trust in the Indonesian insurance business is shaken by the crisis that rocked multiple insurance companies. This study investigates insurance brokerage institutions’ involvement in Indonesia’s insurance activities and how to improve public trust. This research uses normative legal research by examining library materials or secondary data. In contrast, the nature of the research is analytically descriptive, depicting the existence of insurance brokerage institutions in the Indonesian insurance industry for further analysis to complete the picture of brokerage companies’ role in improving the industry. The research found that insurance brokers help insureds choose an insurance carrier, handle the claims process, and resolve claim disputes, making them crucial to Indonesian insurance. Brokers can gain public trust by increasing insurance literacy, transparency of insurance product information, helping consumers resolve insurance claims and advising the Financial Services Authority on insurance regulations. To gain public trust in insurance, the insurance industry should prepare a more effective and comprehensive set of regulations to prevent legal uncertainty and provide adequate legal protection to customers. At a micro level, every regulation prepared by the company can provide certainty. The company’s ethics and corporate governance policy is explicit.

Environmental, Social, and Governance (ESG): Roles and Strategies to Improve the Performance of the Indonesian Insurance Industry

The objective of this research is to understand the role of environmental, social, and governance (ESG) in improving the financial performance of insurance companies in Indonesia. A qualitative, library study method was employed, Research results show (1) the role of ESG as definers of competitive advantage, in improving performance, and guaranteeing the sustainability of the company in the future; and (2) the strategy of insurance companies in Indonesia with respect to ESG is to run business with sustainable financial principles and create environmental-based service products. The implications of this study are that the application of ESG principles to insurance companies in Indonesia is expected to drive government programs to implement sustainable development governance (SDGs) in sustainable finance. The novelty of this research is its emphasis on environmentally-based sustainable financial principles. Keywords: social and environmental governance, roles, strategies, performance, insurance

PELAKSANAAN PRINSIP UTMOST GOOD FAITH UNTUK PRODUK ASURANSI PROPERTY ALL RISK

This research aims to analyze the full application of the principle of good faith in Property All Risk (PAR) insurance products in Indonesia. This study explores how these principles are implemented by insurance companies and understood by policyholders, with a focus on potential challenges and misunderstandings that may arise. This research uses a qualitative approach using interviews and surveys of policyholders and insurance company representatives. Findings reveal that often there is a lack of clear communication from insurance companies regarding the terms and conditions of PAR policies. Many policyholders do not fully understand coverage and exclusions due to the complex legal language used in the policy. This lack of understanding can cause disputes during the claims process. This study is limited to the Indonesian insurance market and focuses on one type of insurance product only. This research suggests that insurance companies need to improve their communications strategies to ensure that policyholders fully understand the terms of their insurance policies. This can be done by simplifying the language used in the policy and providing a more comprehensive explanation during the policy issuance process.

Exploring the level of realm disclosure for Indonesian insurance business using ISO 31000

Exploring the level of realm disclosure for Indonesian insurance business using ISO 31000

Investigating the Impact of Digital Business Intensity and Transformation on Organizational Ambidexterity and Sustainable Performance in the Indonesian Insurance Industry

Investigating the Impact of Digital Business Intensity and Transformation on Organizational Ambidexterity and Sustainable Performance in the Indonesian Insurance Industry

Pengaruh Net Premium Growth Ratio, Solvency Margin Ratio, Underwriting Ratio, dan Investment Yield Ratio Terhadap Return On Equity

This research is a study conducted to analyze the effect of the Net Premium Growth Ratio, Solvency Margin Ratio, Underwriting Ratio, and Investment Yield Ratio on Return on Equity in General Insurance Companies Registered in the Indonesian Insurance Directory for the 2018-2022 period. This study uses a quantitative approach with secondary data sources obtained from company financial reports issued by each company. The sampling technique in this study was to use purposive sampling so that 20 companies were selected based on the sample criteria. This research is a quantitative research using panel data regression analysis method with the help of eviews 10. The results showed that the Net Premium Growth Ratio and Underwriting Ratio had no and significant effect on Return on Equity, Solvency Margin Ratio and Investment Yield Ratio had a significant negative effect on Return on Equity.

Efforts to Strengthen the Indonesian Insurance Sector through the Policy Guarantee Program

Efforts to Strengthen the Indonesian Insurance Sector through the Policy Guarantee Program

Actuarial Risk Management Practices and Firm Performance: The Mediating Role of E-Service Innovation

Actuarial Risk Management Practices and Firm Performance: The Mediating Role of E-Service Innovation

Risk-Based Premiums of Insurance Guarantee Schemes: A Machine-Learning Approach

Introduction/Main Objectives: This study explores the application of machine-learning techniques to risk-based premium calculations for insurance guarantee schemes within the Indonesian insurance market. This study aims to develop a risk-based premium calculation model using machine-learning techniques in the Indonesian context. Background Problems: A gap exists in determining risk-based premiums for both the life and non-life insurance sectors within the Indonesian insurance market. Identifying and understanding the key variables that significantly influence risk-based capital (RBC) is important, and this research addresses this need. Novelty: This paper is the first to apply machine learning to calculate risk-based premiums in the context of the Indonesian insurance market. The distinction between the life and non-life insurance sectors in terms of the importance of its variables and itsselection of an optimal model further enrich its unique approach. Research Methods: We employed gradient-boosted and decision-tree models to identify key factors impacting risk-based capital. Furthermore, we leveraged clustering techniques to categorize companies into distinct risk tiers, aiming to enable more precise risk-based premium rate calculations. Finding/Results: The findings reveal significant differences between the life and non-life insurance sectors in terms of key variables that impact their risk-based capital. These insights lead to the categorization of insurance companies into distinct risk tiers whichhelps to more accurately calculate risk-based premiums. Conclusion: Machine learning can serve as a powerful tool in refining insurance risk management practices, ultimately benefiting insurers, policyholders, and regulators alike.

Guardians of data: TruMe Life’s continuous quest for data protection

Over the past decade, Indonesia has witnessed a surge in data breaches, raising questions about its data-protection approach. Notable breaches include those in the health, energy, utility, e-commerce, and financial sectors. Recognising this precarious situation, the government passed Law No. 27 of 2022 on Personal Data Protection (UU PDP) in 2022, emphasising individual data rights and promoting accountability among data controllers. This case study describes the data governance, focussing on the Indonesian insurance firm, TruMe Life (pseudonymised), which adheres to international standards and Indonesia’s UU PDP. This case underscores the criticality of robust data governance in ensuring compliance and operational efficiency and bolstering customer trust in insurance, culminating in implications for research and industry practices.

The Impact Of Insurtech On The Insurance Business Model In Indonesia

In Indonesia, the integration of InsurTech into the business process is beginning to manifest, with emerging companies harnessing technology across various aspects, including customer acquisition, underwriting, claims, billing, and customer service. Furthermore, established companies are incorporating technology into specific facets of their business processes to improve overall efficiency and accuracy. Thus, it is intriguing to delve deeper to the phenomenon to understand what factors are driving the growth of InsurTech there, how it spurs business model innovation, what gaps exist between the country’s current insurance business models and the models required for development, and what capabilities existing insurance companies need to fill in these gaps. This is a qualitative study that interviewed 10 participants, which are C-level executives in ten major national and multinational insurance companies in Indonesia. The finding revealed that efficiency gains, achieved through streamlined processes and cost reduction, drive significant investments in InsurTech. Regulatory challenges and technological advancements shape the trajectory of InsurTech. The direct insurer consumer relationship facilitated by InsurTech enhances speed, ease, and transparency in insurance processes. However, challenges such as underdeveloped business models and resistance to innovation exist. Successful InsurTech integration requires a holistic approach, combining creative thinking, supportive leadership, and industry collaboration. InsurTech not only enhances customer experiences but also holds promise for sustainable business growth through operational optimisation in the Indonesian insurance sector.

PERAN BADAN MEDIASI DAN ARBITRASE ASURANSI INDONESIA (BMAI) : ANALISIS PROSES DAN SIFAT PUTUSAN

The aim of this study is to explore the process of insurance dispute resolution through the Indonesian Insurance Mediation and Arbitration Agency (BMAI) and the nature of its decisions. This research is conducted within the framework of normative juridical legal research, utilizing secondary data as the primary source. The obtained data is then analyzed using a qualitative normative data analysis method. The research findings reveal that the process of settling insurance claim disputes through the Indonesian Insurance Mediation and Arbitration Agency (BMAI) involves three main stages designed to provide effective and efficient alternative dispute resolution. These stages include mediation, adjudication, and arbitration. As for the nature of the decisions made by the Indonesian Insurance Mediation and Arbitration Agency (BMAI), they are considered final and binding. In other words, the final and binding nature of these decisions requires all parties involved in the dispute to adhere to and execute the decisions.

Strategi Bauran Humas dalam Membangun Citra Positif Asosiasi Perusahaan Pialang Asuransi dan Reasuransi Indonesia

The decline in insurance penetration levels in recent years has been caused by the increasing number of cases of default by life insurance companies, as well as the revocation of business licenses for the insurance broker industry by the Financial Services Authority (OJK), which has resulted in lower interest among the insurance community. This incident became an obstacle for the Association of Indonesian Insurance and Reinsurance Broker Companies (APPARINDO) in carrying out a public relations strategy to build a positive image. This research aims to find out what public relations strategies are used by APPARINDO in building a positive image of the company, and what challenges are faced when implementing the public relations strategy. The method used in this research is a qualitative descriptive method by collecting primary data through interviews from selected informants and secondary data, namely the results of documentation and direct observation. The informants in this research were the Secretariat General of APPARINDO, the Department of Public Relations and Promotion, and the Head of the Secretariat. The results show that APPARINDO implements the public relations mix strategy or PENCILS developed by Thomas L. Harris. The strategies implemented include Publications, Events, News, Community Engagement, Lobbying and Negotiations, and Social Responsibility.

A Structural Equation Model of Governing Factors Influencing the Development of Sustainable Insurance Product in the Future

Designing and proposing sustainable insurance programs to insurance companies that run their businesses in Indonesia have been one of the insurers’ approaches to creating more stable and certain industry climate. Moreover, the Indonesian Financial Services Authority or OJK encourages financial services sector actors in creating, developing sustainable product innovations, and supporting financing of production activities that can create economic growth, social justice and environmental quality improvement. We conduct survey and analyze whether insurance companies in Indonesia are interested in implementing sustainable finance in insurance industry and developing sustainable insurance products. Participants’ responses depict insurance firms’ paradigm on sustainable insurance. In this study a framework is proposed for governing factors that impact the development of sustainable insurance product in the future such as the level of knowledge, readiness, and current sustainable insurance product development. To clarify the relationships, a structural equation model is utilized to examine the framework fit with the hypothesis for the four latent variables of this study. Acceptable goodness of fit is established for validity of the measurement model. The test of validity is accepted for the structural model in this study. The SEM results conclude that an insurer’s knowledge of sustainable finance principles affects the insurance firm’s readiness to implement sustainable insurance. Subsequently, the insurer’s readiness affects its current level of sustainable insurance product development. Eventually, the insurer’s knowledge and current development in sustainable insurance products have a positive effect on the insurance firm’s willingness to develop sustainable insurance products in the future. Thus, this study provides valuable information about factors affecting the development of sustainable insurance products in the future as a key for a successful implementation of sustainable finance in Indonesian insurance industry.

The Influence of Critical Success Factors of Innovative Insurance Product Development Concept Test towards Purchase Intention: An Empirical Study of Millennials and Generation Z as Target Market in Indonesia

The insurance industry faces numerous challenges, including intensifying competition, shifting customer expectations, and disruptive technological advancements. To navigate these challenges successfully, insurance companies must embrace innovation in product development. This approach enables them to meet the evolving needs of customers, adapt to market changes, and deliver greater value to their clientele. In Indonesia specifically, insurance companies face the considerable challenge of low insurance penetration, which has remained stagnant over the past five years from 2017 to 2021 (AAJI, 2022). Furthermore, insurance literacy and inclusion levels are alarmingly low, standing at only 19.40% and 13.15%, respectively, significantly below the Indonesian averages of 38.03% and 76.19% (OJK, 2019). Considering these challenges, PT Delta Echo Lima Insurance (placebo name and hereinafter named “DELI”) aims to address these issues by developing innovative, customer-centric insurance products and aspires to launch a ground-breaking insurance concept in Indonesia targeting Millennials and Generation Z. This research focuses on analyzing the characteristics of the target market and examining the correlation between critical success factors as key dimensions of the concept test for innovative insurance products and their influence on perceived innovation, perceived value, perceived price, and purchase intention. Additionally, an overall relationship model is established to provide a comprehensive understanding of the interconnections between these variables. To gather data, a quantitative approach was employed, utilizing questionnaires as the primary research instrument. The aim was to collect responses from two distinct groups of participants: Millennials and Generation Z. The collected data was then processed using the SmartPLS 3.0 software application, enabling the application of Partial Least Square Structural Equation Modelling (PLS SEM) analysis to derive insights and draw conclusions. This research provides valuable insights into the influence of critical success factors of innovative insurance product development concept tests on various aspects, including perceived innovation, perceived value, perceived price, and purchase intention among Millennials and Generation Z. The findings shed light on the unique characteristics of these target markets and highlight the significance of perceived value in driving customers' purchase intentions. By understanding these dynamics, insurance companies like PT DELI can better tailor their product development strategies to effectively cater to the needs and preferences of Millennials and Generation Z while addressing the challenges and opportunities within the Indonesian insurance industry.

Analysis of Motor Vehicle Insurance Coverage Under Indonesian Insurance Law

Motorized vehicles are one of the forms of transportation that are needed by Indonesian people to carry out their daily activities. The development of motorized vehicles in circulation will also make traffic conditions more congested. Motor vehicle insurance is insurance for losses in which there is no specific regulation in the Commercial Code (KUHD). All general general insurance provisions in the Criminal Code apply to motor vehicle insurance. The research method used is descriptive qualitative research with an empirical juridical approach. Insurance law is an object of civil law, if it is concluded that unless specified in the Commercial Law Code (KUHD) as a special provision as an agreement. An insurance agreement is an agreement in which one party (guarantor) agrees to bear the risk of an event where the event cannot be determined. On this basis the other party (the insured) is threatened and has an agreed interest in the occurrence of the insured event. The insurer will pay the insured in the form of money or other benefits that have financial value. Insurance in the Criminal Code shows that there is a scope arrangement that focuses on fire insurance, while there are various other types of insurance that also require regulation. From what has been discussed above, it can be concluded that the insurance business as an institution that collects funds belonging to the public runs its business adhering to sound business principles and is responsible for the arrangements ordered by the government and also accountability is carried out by issuing insurance policies that have been agreed upon jointly by the insured and the insurer as well as the premium payment by the insured to the insurer so that there is a transfer of risks arising between the rights and obligations between the two.

Penyelesaian Klaim Pada Asuransi Kendaraan Bermotor Melalui Badan Mediasi dan Arbitrase Asuransi Indonesia (BMAI)

Insurance or about liability is an agreement between two or more parties in which the insurer binds himself to the insured by accepting insurance premiums to provide compensation to be taken due to loss, damage or expected loss, or take the law to third parties who may suffer from events that are not absolutely covered by the insured, or provide a payment based on the death or life of someone who is covered (Article 1 sentence (1) of Law No. 1992). In a motor vehicle insurance agreement, it is not closed to the possibility of disputes, these disputes are usually within the period of claims caused by the insured and the insurer. One way to resolve the dispute is through the Indonesian Insurance Mediation Warm Up (BMAI). The Indonesian Insurance Mediation Agency (BMAI) is an independent body that has independent mediators assigned to conduct insurance claim disputes resolved between the insured and the underwriter. An insurance claim dispute is a dispute between the insured and the insurer that respects one of the parties does not carry out the agreement that has been made with all due consideration or even because there is a party who defaults, to the detriment of one of the parties. The procedure for resolving motor vehicle insurance claim disputes goes through 2 stages, namely the mediation stage and the adjudication stage. If the dispute can best be resolved at the mediation stage then resolve the dispute, otherwise if the dispute cannot be resolved at the mediation stage then the settlement is drawn to the adjudication stage. Not all claim disputes can be resolved through the Indonesian Insurance Agency Mediation (BMAI) because there are conditions that must be met by the insured. Even though the conditions have been met, it does not rule out the possibility that the dispute over the insurance claim process through Warms Up Indonesian Insurance Mediation (BMAI) will be constrained.

Pengaruh Kebijakan Countercyclical Yang Dikeluarkan Oleh Otoritas Jasa Keuangan Akibat Penyebaran Covid-19

The covid-19 pandemic has had an impact on the global economic downturn in all types of economic business, including insurance in Indonesia. The purpose of this study was to analyze the effect of countercyclical policies issued by the Financial Services Authority due to the spread of covid-19. The method used is normative juridical which is descriptive analytical by describing the implementation and problems surrounding the effect of countercyclical policies issued by the Financial Services Authority due to the spread of covid-19. Covid-19 has had an impact on Indonesian insurance. The Financial Services Authority issues countercyclical policies for non-bank financial institutions through Letter Number S-11/D.05/2020 concerning Countercyclical Policies for the Impact of the Spread of Covid-19 for Insurance Companies. The issuance of this rule by the Financial Services Authority will affect the parties in the insurance agreement, namely the insured and the insurer.

The Effect of Corporate Governance Regulation on the Profitability of Insurance Companies in Indonesia

This study is driven by the growing importance of insurance companies in Indonesia and corporate governance as determinants of their profitability. Corporate governance is crucial in insurance companies as they provide instruments for risk transfers and savings mechanisms and promote investments in an economy. Our research examines the impact of implementing good corporate governance regulation POJK 73/2016 on the profitability of insurance companies in Indonesia. Using samples of all listed Indonesian insurance companies across 200 observations by employing LSDV panel data and 2SLS models, we found that the regulatory reform is negatively related to the company’s profitability and thus reduces performance. The outcomes of this study advocate for the continuation of fine-tuning of existing regulations so it could deliver the stated objectives.