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ndonesia has proved to be a honey pot for the sharia insurance business, which has recorded steady growth during the last several years, but a number of obstacles may affect future growth, a senior insurance executive has said.

President director of Canadian-based PT Sun Life Financial Indonesia, Bert Paterson, said in Jakarta on Tuesday that sharia insurance in Indonesia was growing sharply with a growth rate of between 20 percent and 40 percent in the past few years.

PT Sun Life Financial Indonesia is one of those companies enjoying the growing market. The company booked a 140 percent increase in premium income last year from Rp 815 million (US$83,873) in 2011, he said.

Sharia insurance contributions accounted for 27 percent of the company's total premium income, surpassing its initial target of 25 percent set when the sharia product was launched in December 2010.

With its huge population, growing economy and low insurance penetration, Indonesia offers huge opportunities for the insurance industry, both conventional and sharia insurance.

Despite the promising market in Indonesia, however, Paterson said some challenges had to be resolved.

A lack of awareness among the majority of the population was a key challenge for most insurance companies. Even though the average spending on insurance had increased, awareness among most people on the need for insurance was still generally low, he said.

The lack of differentiation between sharia and conventional insurance is believed to be another obstacle to gaining larger markets. Most of the sharia insurance offered to customers is little more than a replica of conventional insurance.

'We need to develop specific products that are not the same as or similar to conventional products,' Paterson said. (koi)