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RI insurtech industry to triple by 2026, Redseer says
Low insurance penetration in the country indicates that the market is still very wide and open for further expansion.
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"Now, digital players are able to penetrate deeper and able to offer more affordable packages to users," Roshan, partner of Redseer Southeast Asia, said. (Shutterstock/thodonal88)
T
he insurance technology (insurtech) industry in Indonesia is projected to grow on average by 32 percent annually, according to a study from management consulting firm Redseer.
The growth is measured in gross written premium (GWP), and if measured from now, the industry will triple in terms of GWP by 2026, the same study shows.
The GWP measures premium revenue received by insurers but does not factor in deductions from the commission paid to agents who sell the policies, legal expenses associated with settlements, salaries and taxes, among many other aspects, according to Investopedia.
Roshan Raj, partner of Redseer Southeast Asia, said the jump was caused by the base effect of unripe insurance business in the country, as well as substantial funding that goes into local and regional insurtech firms.
The report cited that the penetration of digital insurance in Indonesia was just 1 percent in 2021, lower than India (2 percent), China (6 percent) and the United States (14 percent).
Read also: EV insurance in limbo amid battery, spare part risks
In the last three years, homegrown insurtech start-ups like Qoala, PasarPolis and Fuse each raised more than US$50 million in funding. They are followed by smaller players, such as Rey and Aman, which secured $4.2 million and $1.2 million, respectively last year.
