PT Visionet Internasional (OVO), a digital payment, rewards and financial services platform in Indonesia, and PT Prudential Life Assurance (Prudential Indonesia), have launched Asuransi Jiwa Kumpulan Syariah PRUTect Care (PRUTect Care - Hospital Cash), a digital sharia life insurance product with affordable contributions (premiums).
The product is provided by Prudential Indonesia through insurance broker PT Salvus Inti and can be accessed through the OVO digital app.
Indonesia remains a significantly underinsured market despite being ASEAN’s largest economy and registering robust economic growth averaging over 5% in the past three years prior to the COVID-19 pandemic. Indonesia’s Financial Services Authority (OJK) noted that as of 2020, insurance penetration in Indonesia, which has a population of around 270m, was less than 4%.
A survey conducted by OVO in several major Indonesian cities found that the lack of insurance coverage was influenced by the perception that claims processes were difficult and time-consuming. Many respondents also cited the financial burden of having insurance. Interestingly, 47% of the respondents expressed an interest in buying sharia-based life insurance in the near future.
This interest in sharia-based insurance reflects the rapid rise in demand for sharia-based services and products in Indonesia. According to The State of Global Islamic Economy report 2020/20212, in 2020 Indonesia was the world’s fourth largest sharia economy, rising from tenth position in 2018 within the space of just two years.
Prudential Indonesia president director Jens Reisch noted that the ongoing COVID-19 pandemic has increased Indonesians’ awareness of the importance of life insurance protection, but many individuals remain reluctant to purchase insurance due to barriers of affordability and accessibility.
PRUTect Care - Hospital Cash is designed to offer users an affordable, accessible, sharia-compliant life insurance product which can be easily purchased on the OVO app. Users have the option of monthly or yearly contribution payment schemes, starting from IDR5,000 ($0.34) per month.
The product provides comprehensive benefits to the customers, including basic death-benefit and other preferred protections, such as daily hospital cash (non-ICU-Intensive Care Unit), daily hospital cash (ICU), permanent disability due to total accident benefit, death benefit due to infectious diseases and death benefit due to accident.
In 2019, Prudential Indonesia established a long-term partnership with OVO to expand access to life insurance for the Indonesians. This arrangement gives Prudential Indonesia access to OVO’s large user base nationwide, spanning all of Indonesia’s 34 provinces.
In early 2020, OVO and Prudential Indonesia collaborated to provide premium-free accident and COVID-19 life insurance to help Indonesians at the onset of the COVID-19 pandemic. Approximately 222,000 individuals registered through the OVO platform during the program period, which ran until 31 May 2020.
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