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lthough health insurance in Indonesia has been growing at a slower pace than in some neighboring ASEAN member countries, over the past few years it has shown more rapid development.

Theoretically, several important factors have contributed to the slow growth in Indonesia, such as low demand and low incomes among most of the population, the limited number of insurance companies available and the substandard quality of many health services as well as a degree of legal uncertainty.

Generally, Indonesians are '€œrisk takers'€ in matters of ill-health and death. Sickness and death for religious Indonesians are perceived as the will of God or fate; so many still think that buying an insurance policy is akin to going against the will of God. This factor results in low awareness about health insurance coverage. Additionally, health facilities are often insufficient or lacking in the coverage needed to support the implementation of health insurance.

To learn about the latest developments in health insurance in Indonesia The Jakarta Post recently interviewed the chairman of the Indonesian Life Insurance Association (AAJI) for the period 2011-2014, Hendrisman Rahim. The following is an excerpt from that interview:

Question: For the past few years, health insurance has grown rapidly in Indonesia. What is your view of the current situation?

Answer: As we all know, a product like health insurance can be produced and marketed by life insurance companies, general insurance companies and state insurance companies like Askes, Jamsostek, Asabri, Astek, Jasa Raharja, which in some cases are based on sharia principles. Health insurance can be purchased collectively (corporate cover), while for individuals it usually takes the form of a rider or additional benefits after the customer is covered by the main insurance product.

What factors have contributed to the increased take-up of health insurance?

This rapid increase is inseparable from the active role of marketers, insurance companies, hospitals as well as changes in the law, which has made such coverage compulsory. Another major factor, according to me, is the cost of health services and medication, both of which go up every year. Also, the emergence of a number of new fatal diseases, such as the ebola virus and, more recently, bird flu. Global warming, in my opinion, has also contributed somewhat to the increase.

How high is awareness among the public about the importance of health insurance?

Awareness has started to improve, which makes us happy. More people are starting to understand the importance of health insurance coverage.

What is the market share of health insurance holders, both individuals and corporations?

Unfortunately, the AAJI does not have such data, which is provided by insurance companies. However, we estimate the percentage is definitely significant. As an illustration, although this is not a reference, the unaudited data of life insurance as of the second quarter (Q2) of this year shows that the number of corporate or collective holders was 68,539,928 or 28 percent of Indonesia'€™s population, which totals about 240 million. Medical claim payments as per Q2 2013 amounted to Rp 2.14 trillion. On top of these totals, one can add figures from general and state insurance companies. So, in my opinion, the market size is extremely large.

What is the increase in health insurance development in Indonesia?

In 2010, the number of collective or corporate holders amounted to 22,995,851, which reflected growth of 7.29 percent. Then in 2011, there was a major increase of 84.55 percent with the number rising to 42,439,063, while in 2012, the number of holders rose by 20.03 percent to a total of 50,938,661.

How many insurance companies are currently members of the AAJI ?

Forty-eight companies are AAJI members.

How many of the total AAJI members offer health insurance? What is the development situation among health insurance companies in Indonesia today?

About 33 companies now offer health insurance products.

With the full operation of the Social Security Providers (BPJS) and the application of the National Health Guarantee (Jamkesnas) scheme slated for Jan. 1, 2014, insurance companies will not be allowed to sell those benefits that are covered by Jamkesnas. Currently, insurance companies are preparing health insurance products that offer different benefits from those provided by Jamkesnas, such as hospitalization at a standard above first class or at overseas hospitals and so forth. For such matters, we plan to sit down to discuss and coordinate everything with the BPJS and, hopefully, the BPJS and the AAJI will sign a memorandum of understanding (MoU) on claim procedures and payments.

What is meant by a unit-linked product?

This is a life insurance product that includes investment benefits as detailed in the unit. It can also be packaged to include additional benefits or a rider for health insurance, as is the case in traditional life insurance policies that offer whole life or endowments.

What is the AAJI'€™s opinion of insurance companies that break regulations concerning, for example, claim payments? And what steps does the association take if an insurance company is involved in a dispute with a customer?

In the case of delayed or unpaid claims, it is wise to review things on a case by case basis. Sometimes, customers are also cheeky by not disclosing the required material information when making a claim. It is best that customers are honest when filling in their insurance forms by providing full and complete data to avoid problems during the claim application. When this is done, life insurance companies will fulfill their obligations regarding claims.

According to AAJI data, the total number of claims and amount paid out from 2009 until 2012 is as follows:

So, the life insurance industry has already paid claims for 2009 through 2012 totaling Rp 220.32 trillion, which is not a small figure. If a customer experiences any difficulty when making a claim, we suggest that he or she contacts the Indonesian Insurance Mediation Agency (BMAI), which offers a free service.