This is much lower than in neighboring countries, such as Singapore, Malaysia and Thailand, all of which have national insurance penetration rates of at least 5 percent.

Numbers from the Indonesian Life Insurance Association (AAJI) paint a similarly problematic picture of insurance coverage in the country, with 17.66 million insured people registered in the second quarter of 2017, which marks a 7.59 percent decrease from the 19.11 million counted in the corresponding period of 2016.

Licensed life insurance agents numbered 520,281 people nationwide as of the third quarter of 2017. That number is still far below the OJK's goal of having 10 million such agents in Indonesia.

Tapping potential with technology

All of this data may create the impression of a long and hard road ahead for Indonesia's insurance industry, but for life insurance provider PT FWD Life Indonesia, it also presents a horizon ripe with opportunities and untapped potential.

"The insurance industry's reliance on traditional business principles is holding back its potential. Technology, in particular, plays no role yet. This is the opposite of other industries, like transportation, that have enjoyed great success through the use of things like smartphone applications to give customers an improved business experience that helps them better meet their demand," FWD Life's Chief Agency Officer Hendra Thanwijaya told The Jakarta Post.

Traditionally, the way insurance agents work to find customers is through personal contacts. They would look for uninsured people among their circle of contacts, friends and family. A lot of waiting and looking for customers is involved. This process is very much a one-way street, with agents often spending hours offering a product to consumers.

This method has contributed to the public perception that buying insurance is a cumbersome and tedious process. Most people, according to FWD Life, may know that they need insurance, but they also think that the hassle involved in becoming a policy holder is too complicated. Not to mention the fact that people generally view life insurance as too expensive for them to afford.

What FWD Life wants to do with FWD LooP, its newest life insurance product launched on Feb. 12, is to help move the industry forward and increase domestic penetration by changing the way insurance marketing works and bringing insurance to the digital age.

How FWD LooP changes things

FWD LooP is a comprehensive life insurance product that covers accidental death, permanent disability, critical illness and inpatient fees at an affordable price. Premiums are adjusted according to age, with prices going as low as Rp 250,000 per month for the 18 to 25 age group.

“Most people know they need life insurance, but they look at the most affordable life insurance products on the market and they see only coverage for simple things like basic accidents. They know that complete coverage will be expensive, so they don’t get it. But with FWD LooP, all is covered, starting at Rp 250,000 per month,” Hendra said.

What makes FWD LooP so different is the way customers learn about and purchase the product. No longer do they have to wait for an agent to come to them and spend hours presenting what it has to offer. Nor do they have to wade through traffic and visit insurance offices. 

Through the website www.fwd.co.id/FWDLooP any potential customer can learn about the features and benefits of FWD LooP and know upfront the premium they will have to pay – all from the convenience and comfort of their own homes.

Customers who are interested in buying the product can then meet with an FWD Life agent at a location and time of their own choosing to finalize the process.

Millennial-friendly, OJK-compliant

This unique way of buying insurance serves three main purposes.

For one, having an accessible and easy-to-read source of information for customers to learn about FWD LooP is a better draw for younger consumers of the millennial generation, as statistically they are known to be more likely to purchase products if they can learn about them beforehand through the internet.

Second, because the customer and the agent meet up, the process also has the benefit of fulfilling the OJK’s “Know Your Customer” regulation for financial technology companies to identify and verify the identity of clients. Further adding to the “Know Your Customer” principle, customers interested in FWD LooP are required to fill out forms on personal information.

Finally, the third advantage of this system is that it helps improve the productivity of life insurance agents. No longer do they limit themselves to only their personal contacts. They can also convert potential customers into actual customers more quickly, as they no longer have to spend hours teaching them the basics of the product of offer.

Modern technology also makes the profession of life insurance agents more socially appealing.

“When we look at ojek (motorcycle taxi) drivers, it has now become a profession and a career. Why? Because they can get customers with innovative products thanks to technology. With technology and good product design, I feel that young people can see that the profession of a life insurance agent is trendy. The OJK wants to have 10 million agents in Indonesia. Making agent work more appealing can help the OJK reach that goal,” Hendra said.

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