"People earning low incomes assume that insurance products are difficult to understand and to obtain. They also believe that they are expensive and claiming them is a long-drawn process," OJK director for the sharia non-banking financial industry, Moch. Muchlasin, said here on Wednesday.
Therefore, the insurance industry should strive to provide simple, easy and economical micro-insurance products, and the OJK will cooperate with several parties to realize this.
"The FSA joint insurance association, the Life Insurance Association of Indonesia (AAJI), the General Insurance Association of Indonesia (AAUI), and the Association of Islamic Insurance Indonesia (AASI) have developed standard micro-insurance products," he noted.
He was optimistic that with their efforts, low-income earners will have easier access to insurance products.
Moreover, the OJK director added that the available insurance products were of little use to low income earners.
"Insurance products should suit the needs and understanding abilities of low income earners as they do not comprehend them properly," he explained.
In keeping with this goal, the OJK and the insurance industry developed micro-insurance products since 2013 in a bid to encourage the availability of products that are useful to those earning low incomes.
"The products have been tailored to suit their needs and understanding abilities," he stated.
Furthermore, even though insurance companies have marketed the micro-insurance products, they have been unable to meet the needs of most people.
"It will take several companies and more micro-insurance products to meet the needs of the community," he remarked.
The OJK director also noted that a number of stakeholders and the financial authority had come up with standard micro-insurance products and standard sharia micro-insurance products, and that to widen the market, active participation from the insurance industry was required.
"(Their active participation is required) especially in appealing to low income earners. This way, the development of micro-insurance programs can serve to act as one of the pillars of financial inclusion," he remarked.
(Uu.A063/INE/KR-BSR/A014)
Editor: Priyambodo RH
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