Insurance and Insurtech in Indonesia

Summary of this blog post can also be digested in presentation form.

In the past decade, the insurance industry in Indonesia has been growing from IDR 125 trillion in 2010 up to nearly IDR 500 trillion this year. Despite this growth, penetration in population is still very small. In terms of economic contribution,, insurance spending only account for 2.3% of GDP while the number of private insurance policy holders also less than 3% of the population. In 2014, national health insurance (BPJS Kesehatan) was established by SBY Administration. Current coverage for this is estimated around 75% of population or ~180 million people. With the rate of growth and low penetration of private policy holders,  Insurance market in Indonesia is a massive untapped opportunities. 

Current market value are still majority contributed from Life Insurance. Based on Insurance Association data, more than 80% of gross written premium are from Life Insurance product such as Term-life, Whole-life and Investment Bundled Product (Unitlink). Unit Link is the most sold product of all life insurance, with contribution of more than half of premium sold in 2014. For general insurance, market size are driven by car and motorcycle insurance.

In terms of distribution and sales channel, majority of insurance sales are still driven by agents and banc assurance. Agent solve the needs of consultation and product knowledge due to the complexity of insurance products. While for banc assurance, insurance companies are helped by bank agents and customer services to advocate their product to banks existing customer base. 

Recent surge in insurtech makes many people buy insurance online. However they mostly buy simple, one-time product such as flight, delivery or gadget insurance which have simple straightforward policy. Price is usually very cheap as well. Online channel drive high-frequency, low-value transactions. Hence in terms of total market gross premium value, it will still likely contributed by life-insurance sold by agents.

Insurance principal can be divided into two big categories : Life insurance and general insurance. Both have distinct market dynamics. Life insurance are quite concentrated with Prudential as clear market leader. Most of the big players in Life Insurance also foreign entities such as Allianz and Manulife. General insurance on the other hand is quite fragmented with Sinarmas, Jasindo and Astra closely competing to be top 3. Sinarmas and Astra premiums are driven by auto and property insurance while Jasindo and other state-owned insurance (Tugu, Askrindo) are contributed by industry insurance supporting other SOE (e.g Marine, Oil & Gas insurance).

Key Insurance Players Overview in Indonesia

With low market penetration and sales mainly driven by offline channel, Insurance market are just prone to be disrupted by digital players. From big insurance principal who goes digital up to rising startup who try to break through using innovative products.

Continue reading “Insurance and Insurtech in Indonesia”

Three Challenges Startup Faced in Serving Indonesia’s Unbanked Population

In Indonesia, access to basic financial service such as saving and lending is a priviledge. The country with more than 250 million people has only less than 40 million recorded bank account according to World Bank. The country stands at the top of  Asia Pacific in terms of unbanked population with three quarter of total population are still outside of conventional financial system.

At glance, these statistics looks bleak. But for entrepreneurs and startups, it means massive opportunity fintech. Indonesia is currently a fintech hotbed with more than 150 startups and record-high investment of USD 57 million in 42 deals by last year alone. Half of that deals went to lending and payment startups.

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Picture of shallot sellers in Jogja, one of the many millions unbanked population in Indonesia. Photo by Andy Al Mesura on Unsplash

I work as a product and business development guy in a peer-to-peer lending startup. Our startup focus is to provide microlending to millions of unbanked and underbanked women entrepreneurs in Indonesia. In this post, i will share three challenges that i have to deal on a daily basis. The challenges will slightly skewed to lending business model but i try to make it relevant for other fintech as well.

Lets start!. Continue reading “Three Challenges Startup Faced in Serving Indonesia’s Unbanked Population”

Learning Blockchain

I wrote a post about being a skeptic in this particular technology called blockchain a while ago. Apparently, this bite me in the ass because just one day after writing that post, Andi Taufan (our CEO in Amartha) stated in our yearly plan townhall that he would like to start exploring how blockchain could benefit our business in the upcoming years.

Well, that leave me no choice but start diving  because as skeptic as i am into blockchain, who doesnt want the opportunity to work in something the whole fuckin world goes bonkers about. Besides its always exciting to learn something new.

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Studying in midnight. The only quite time a parent with a high energy toddler can have

So here in this post i share some of things i read or watch to help me understand the hypebeast that is blockchain. I am by all means a complete rookie so do help me by recommending better or more comprehensive source in the comments below.

Lets go! Continue reading “Learning Blockchain”

The Formation of Emerging Tech Start-up Cluster. Study Case of Slipicon Valley, Jakarta, Indonesia

Following up my last post, in this post i will put the abridged version of my master dissertation. At first, i hesitated to put this in blog because after reading it again after submission, i realized it was total shit. However, several days ago i received my final grade from the university and it way over what i expected. I got near perfect grade for my dissertation hence i was officially graduated Master of Science with distinction.

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Msc Dissertation

Due to those result, i decided to post the dissertation on my blog. I hope that it can be useful somehow especially for someone who wants to pick Indonesia / Jakarta / Slipi start up ecosystem as a research topic. 

The whole document 21 thousand word long which i think is too overwhelming if i copy paste everything here. Hence i will post only certain chapters such as research background, context introduction, analysis, conclusion and limitation in order to be more digestable.

If youre interested in the full document, you can download it here.

If you just want to read the broad overview of my research and dont want to be bothered by this 6000 word post, check out this slide

As an acknowledgement, this dissertation was written by me, Kiki Ahmadi , and supervised by Dr Elvira Uyarra. This dissertation was submitted to The University of Manchester for completion of  MSc degree in the Faculty of Humanities in September 2017. 

Continue reading “The Formation of Emerging Tech Start-up Cluster. Study Case of Slipicon Valley, Jakarta, Indonesia”

Ideas On Traveloka

So couple days ago i applied for a job opening at Traveloka. Im still working on my dissertation but reading the job description got me interested. Unfortunately i didn’t pass the analytic test. Got bad history with this kind of test. A little bit disappointed but on a bright side this probably a sign that i should gave 100% focus on finishing my thesis.

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Photo by Steven Lewis on Unsplash

Since Ive been using their services for quite some time, i had several improvement ideas which i plan to develop inside the job application. I thought this might be useful if i get called for interview. However since it is not my luck this time rather waste the ideas, it might be better if elaborate it more here. Writing it can serve as means to stretch my “idea machine” while also a way to embrace my failure. Hopefully it will be useful in some ways for anybody who read this.

So here we go. Continue reading “Ideas On Traveloka”

Silicon Roundabout: cluster evolution and effect of public policy in Inner East London Startup Cluster

Digital economy is currently huge economy contributor for United Kingdom. In 2015, this sector contributed 97 billion pounds and provide more job growth than any other sector in the country (Tech City, 2017). Majority of UK digital economy activities is concentrated in London, specifically in the area called Silicon Roundabout. The cluster is the home of more than 3000 digital media and internet companies, most of them are newly-established and small-sized.

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Silicon Roundabout (image source)

This essay will discuss the development of Silicon Roundabout cluster and how public policy have impact on that process.  Short overview on the cluster will be discussed first as the starting point. After that the evolution of cluster will be described followed by discussion on the cluster policy impact. In the later part of the essay, challenges facing the cluster will be explained and then closed by essay conclusion. Continue reading “Silicon Roundabout: cluster evolution and effect of public policy in Inner East London Startup Cluster”

Benefits and Challenges of Innovating Public Services Through E-government.

This is my submitted essay for professor Ian Miles’s Service Innovation class. I got a really bad grade for this essay, probably the worst grade in my master’s course. However i believe there is some useful info in this essay and hopefully by posting here, it could be a stern reminder for me to keep getting better better again in writing. I hope it helps. 

E-government is an innovation in public services which aim to simplify and amplify the relationship between government and the citizens (Rodríguez, et al., 2011). The technology was seen not only to as a tool public service delivery but also a bigger platform which government can perform better in multiple aspects. Seeing this potential, increasing number of country are developing and implementing e-government. According to UN E-Government report, the number of countries providing services through the internet jumped five times, from 33 to 148 in the span of 2003 to 2016 (UN, 2016). However, the successful rate is very low due to the various challenges both from the technical and non-technical side.

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South Korean booth in UN Public Service Forum (source)

This essay attempt to discuss what is the prospect and challenges of e-government implementation as a public service innovation. First, the trend and historical context which help the conception of e-government will be explained. Following that, the essay will discuss several definitions and classification of e-government to shape the understanding about this technology. Subsequently, potential benefits and promises of e-government will be described. In the final chapter, several challenges regarding e-government implementation will be discussed along with ways to address that. Continue reading “Benefits and Challenges of Innovating Public Services Through E-government.”