It cannot be denied that our life graph experiences ups and downs. What will happen tomorrow morning, even 1 second in the future no one knows. Only God knows. In other words, our lives will experience unexpected risks. These risks can be in the form of a risk burden on oneself, family, or assets that we have. We do not realize or think that the conditions that initially seemed bright or without any obstacles regarding wealth and self and the family around us immediately turned into a disaster and difficult to control. How devastated we are and so futile, if events that occur outside our control, such as illness, accidents, floods, fires, and riots scorch the results of the hard work that we have gotten decades lost in the blink of an eye.
Moreover, conditions of economic instability add to the worries of our lives. The weaker value of the rupiah against the dollar, rising inflation, bank interest which increasingly suffocates the neck to make property can be lost in seconds. Plus the cost of living is increasingly expensive, especially health care costs that make human lives no longer valuable. Only a group of rich people who have a lot of money can help in overcoming health care costs. In addition, the cost of education is increasingly out of control. The cost of entering high school or college is increasingly beyond our capacity. As a result, high school is only for those who have a big pocket.
Not only that, our health condition also decreases with age. If at the moment it still works, not necessarily tomorrow we can work. Because the disease can come suddenly. A disaster or accident that befalls us or our family does not ask permission or knock on the door first. The above conditions are a bit of the conditions that we must face. That is what causes the need for protection that can guarantee our lives. One solution that we can do is to have an insurance program.
Significance of Insurance
Unfortunately, Indonesian people's awareness of insurance is still lacking. The first time we have to understand the meaning of insurance. Insurance is one form of risk control carried out by transferring risk from one party to another, in this case, an insurance company. Whereas according to Law No. 2 of 1992 concerning Insurance Business, what is meant by insurance or insurance is an agreement between two or more parties, with the insurer binding itself to the insured, by accepting insurance premiums, to provide compensation to the insured due to loss, damage or loss of expected profits, or legal responsibility to a third party that might be suffered by the insured, which arises from an uncertain event, or to provide a payment based on the death or life of someone insured. Many insurances circulating in the community, such as health insurance, life insurance, business insurance, vehicle insurance, travel insurance, and home insurance. A kit can choose one or more according to the needs that we want as protection of our lives.
The public should understand the terms of an insurance. Where, in insurance means our risks are guaranteed by the insurance company. While the terms of insurable risk must meet existing criteria. According to Dahlan Siamat, in the Management of Financial Institutions (2005), these risks must fulfill what is abbreviated as LURCH, namely: 1) Loss (risk that can be insured must be related to the possibility of loss); 2) Unexpected (unpredictable certainty of the risk actually occurs, such as exhausted or damaged due to use); 3) Reasonable (risks that can be insured are objects that have value, both from the guarantor and the insured party); 4) Catastrophic (so that risk can be classified as insurable, the risk must cause a large or very large possible loss); 4) Homogeneous (same or similar in form or nature. This is also related to the principle of the law of large numbers). If we want to know the magnitude of the possible loss of an object, we must have the same type of coverage as a comparison material to estimate the possible losses.
Many factors cause people to be insufficient for insurance, including:
Low level of welfare or community
Low level of welfare or community income making insurance not yet a necessity or lifestyle. Because there are still many other needs that are more urgent to set aside some of their income for the protection of themselves, their families and property. Moreover, if an investment instrument is still too far to think about. That is
Many think that the future of the business will be, the most important thing is to fulfill the needs now. This can also influence public awareness of the importance of insurance. Moreover, many parents generally still rely on their children. The child seems to be considered an "asset" so that independence lives until the twilight is not prepared. If we imagine that he will grow old and his child cannot take care of him because of his busy life or the economy of his poor family, of course he will be encouraged to have insurance from an early age.
the capacity of the business world regarding the importance of insurance which is still relatively low has led to efforts to educate the public is still limited to financial literacy. In fact, socialization about understanding and knowledge is very important to increase public awareness about insurance. So that public knowledge about insurance can be boosted. Indonesian people may already know insurance, but do not feel the need or need to buy insurance. This attitude can be influenced by the perception that insurance is a "business promise". We buy insurance products but the benefits will only be felt later. Even insurance claims may not occur if we are fine, or do not experience a disaster protected by insurance services. There are still very few people who come to the insurance office to declare their willingness to become policy holders. People want to come to the insurance office if there are officers or insurance agents who provide explanations and then offer protection services.
we realize that branch offices, auxiliary branches or banking units have entered the sub-district area, causing the community to be very familiar with the banking world. While branch offices or agents of insurance companies are still rare, even reaching only thousands of provincial cities throughout Indonesia. If anyone has penetrated the market at the district capital level, it can still be counted on the fingers. This gives a signal that the existence of insurance companies is still far behind the banking companies. Finally, the community is still ordinary or minimal about insurance. The impact of knowledge about the importance of insurance is still new.
In addition to these factors, there are many negative paradigms of society towards insurance. Because of various things, like many people who feel trapped when making a claim. The customer does not get the claim as promised at the outset and is written in the insurance agreement policy, because there are some insurance agents who make the article behind the article a shield when they do not issue claims that have been regulated in the policy. Especially with the BPJS program from the Government of Indonesia being a barrier for people to consciously own insurance. We understand that the awareness of the Indonesian people towards health is increasingly high, but the awareness of having health insurance is not yet great. One proof, there is still a lack of Indonesian people who have health insurance. Jamkesmas or BPJS are the mainstay of our community when dealing with hospitals. Coupled with the existence of weak regulations from the Government regarding protection of insurance customers. Finally, customers who have paid premiums for years will be harmed if the insurance company breaks the promise of payment of customer claims.
Maybe we still lack confidence in how minimal the Indonesian people are to have insurance. According to the Chairperson of the Indonesian Life Insurance Association (AAJI), Hendrisman Rahim, during a press conference at AAJI's office at the Plaza Office Tower Jakarta, Friday (3/5/14) as quoted by compass .com, "Of the total population of 240 million, only around 43.7 million people, or only about 18 percent of the total population of Indonesia have life insurance protection. And of the 43.7 million people, only about 11 million people or only 4.5 percent of the total population that has individual life insurance. " Another case with the Sigma World Insurance report in 2010 reported that Indonesia was classified as a country that was worst in protecting or protecting human souls. The size is Insurance Density and Insurance Penetration. Countries with a population of more than 240 million are ranked 11th out of 27 countries in Asia. This position is based on Indonesia's total premium in 2010 of 10.7 billion dollars. The premium includes life insurance and general insurance. The premium amount actually increased by 28.91 percent compared to 2009.
The champion of awareness about insurance in the Asian continent is occupied by Japan. Meanwhile, Indonesia is still far behind the three ASEAN countries: Singapore, Thailand and Malaysia which are ranked 7 to 9. If the total premium is divided by GDP known as insurance penetration, then the value is only 1.5 percent of GDP. For these indicators, Indonesia ranks 16th. If the total premium is divided by the number of residents in Indonesia, the position decreases, which is at position 22 in Asia with a value of per capita premium of 45.8 dollars, or around Rp. 400 thousand.
Moreover, the penetration of general insurance and life insurance in Indonesia is still lagging behind. Based on Fitch's institution's calculation, insurance penetration in Indonesia is only 1.7 percent. This value is still inferior compared to 8.1 percent in the United States or 11.8 percent in the UK and above four percent for Singapore and Malaysia. The cause of life insurance penetration in Indonesia is still low due to a lack of awareness of insurance. Most people consider insurance expensive. Needs such as clothing and food and entertainment are considered far more important to fulfill. In fact, many are more confident and feel safe to invest by saving or buying property than paying an insurance policy.
What the Insurance Do
Then what should be done to increase the awareness of the insured community? The question needs to be answered by all parties who wish to advance insurance. PR for all components of the insurance industry is to build awareness of the insurance community to prepare a better future, provide self-protection and assets amid the government's inability to provide adequate social security.
It's different from the banking world, where people want to come to the bank to conduct financial transactions. In insurance companies, insurance companies must pick up the ball more or be proactive to the public so they are willing to become insurance participants, because there are still few people who have the awareness to come to the insurance company. But someday after public awareness of the importance of insurance is already high, the people themselves come to insurance companies.
The most important thing is that insurance companies must also improve. Insurance agents who are the spearheads of insurance companies must also be addressed. Starting from the recruitment system, education and training, and expertise in delivering insurance information, and explaining its products to the community in a clear, honest and transparent manner. Insurance agents must be more aggressive and knowledgeable. It is time for agents to have knowledge as financial planners who offer total solutions to customers. In addition, service to claims from customers must also be carried out professionally.
We understand that customers are the key to the progress of insurance companies. No matter how great socialization about insurance, it will not be of any use if policyholders are disappointed with the services and claims that are complicated. When seducing the agent's customers so sweetly, but when the policyholder submits a claim, various reasons for rejection are made, which further worsens the image of insurance. If the service for claims made by customers is done professionally and is not complicated, surely the customer will be happy to recommend the company concerned to his partner who is looking for insurance.
Another solution for all people to have insurance is by launching micro insurance in 2016. Micro insurance products are insurance that take the market segmentation of the lower middle class people with an income of no more than 2.5 million rupiah per month. The launch of this micro insurance will be a new milestone in the insurance industry in Indonesia, because even low-income people need to be protected, so that they do not fall into poverty, if there is an accident to the breadwinner, crop failure or other disasters. This new era of insurance investment is predicted to have good opportunities, because of the large population in Indonesia. Microinsurance will provide a favorable outlook for national insurance, especially for types of health insurance, home insurance, and life insurance.
How important it is to inspire people to insure because they can see the factors that can be obtained. By having insurance, the cost of treatment and hospital care will be guaranteed if you fall ill. Also with insurance, you will get a guarantee of old age life. Your child will be guaranteed the cost of education up to the level of higher education. So with insurance, the future is guaranteed to be safer. Insurance will also protect the property that we have if one day we experience an adverse event that we don't want.
In general, insurance benefits for the economy can be explained as follows: 1) Risk Transfer, insurance provides security for individuals and companies, and allows them to take risky activities; 2) Risk Based Pricing, insurance helps to direct investment and encourage business improvement, by showing the real costs of risk to individual companies and industries; 3) Investment Function, insurance builds assets after receiving premiums paid in advance. By investing productively, insurers can generate income levels that allow them to provide lower premium rates. Insurance also facilitates economies of scale in investment, namely by accumulating large amounts of funds from thousands of policy holders that can be used for financing needs of large projects, thereby encouraging economic efficiency and making life more flexible and not dependent on government funding.
Thus, economic development also requires adequate investment support, so that serious effort is needed to mobilize investment funds, especially those originating from community savings. The insurance sector is one of the sectors used as a means of collecting funds from the public. This fund collection is done through the efforts of insurance companies to raise funds in the form of premium income. Insurance can be regarded as one of the pillars of a nation's economy, in addition to banking and the capital market. Insurance has taken a considerable role as a provider of employment, a source of income for the community.
So to increase public awareness about the meaning of insurance requires process and time. Not only that, the important role of all insurance actors and the Government in issuing regulations that can benefit both parties both industrial companies and insurance customers. Someday, Indonesian people will be financially literate by having insurance that is able to protect ourselves, our families and property.