Universitas Gadjah Mada
Faculty of Economics and Business

As a series of summer course program events, International Summer University (ISU) and International Week (IWeek) 2019, and to commemorating the 64th Anniversary of FEB UGM, on Monday (07/22/2019), FEB UGM held CEO Talk with keynote speaker Edie Rizliyanto as President Director of PT. Asuransi Jasa Indonesia (Persero). The event was held at the Auditorium of the FEB UGM Learning Building and was attended by lecturers and all participants from the 2019 ISU and IWEEK.

Edie Rizliyanto explained the role of the insurance industry in the ASEAN business environment. He said that the economic potential in ASEAN is quite large because in 2017 it was recorded a GDP of USD 2.76 Trillion. If ranked, ASEAN will occupy the 5th position in the largest GDP level in the world after America, China, Japan and Germany. In ASEAN alone, the type of life insurance premiums in 2017 amounted to USD70 billion, and non-life insurance premiums amounted to USD30 billion, with the majority of the insurance sector being in motorized vehicles, health and property.

"Data from the Otoritas Jasa Keuangan (OJK) shows that out of a total of 265 million Indonesians, understanding literacy about insurance is still at 15.76% and the need for insurance is 12.08%," he told the participants. He added that from the data, currently only 1.9% of the population has used insurance products. This means that only around 15 to 16 people from 100 people who understand and actively use insurance services.

Moreover, the demographic bonus for 2020-2030 which is predicted to be 70% of the total population is productive age, causing the millennial generation to tend to dominate in various fields, such as online platform usage, social media, data and information, and excellence in innovation and creativity. According to him, three factors are needed for the Insurance Industry to stay afloat in the ASEAN business environment. These three factors are the parent company insurance project (Government Plan), collaborative innovation between Insurtech and Fintech (Developing Plan), and how to educate people mindset (Self Awareness).

"In addition, good attitude, skill, experience and knowledge are needed. Therefore the six challenges of the Indonesian insurance industry are low penetration rates, human capital, financial literacy, insurance in the insurance industry, lack of insurance products, insurance and disaster risk financing can be overcome", closed him.

Source: Sony Budiarso/Leila Chanifah Zuhri