Indonesia: Health insurance business expected to stagnate this year

Health insurance business will be a big challenge this year with industry players expecting that it would be difficult to boost premiums, reported Kontan.

Mr Julian Noor, Executive Director of the General Insurance Association of Indonesia (AAUI), predicted that premiums in the health insurance business in 2017 will not be much different from those of 2016.

Last year, health insurance premiums rose by 1.5% to IDR4.23 trillion (US$317.4 million). This was due to many people who had been buying commercial health insurance switching to the National Health Insurance (JKN) programme administered by the Social Security Agency (BPJS).

Mr Julian said the challenges faced by health insurance business are due to the lack of agreement between commercial insurers and the BPJS on coordinating health insurance scheme benefits so that government-run and private-sector health insurance schemes would complement each other. Some health insurance customers are opting to wait and see until there is clarification of benefits.

He said that commercial insurers will increase their focus on the retail market segment, especially the upper middle class. According to him, the needs in this segment are still high, consistent with lifestyle and increases in healthcare costs.

In January 2014, Indonesia’s government launched an ambitious project: to establish the JKN national health insurance system with the aim of making basic care available to all by 2019.