This insurance portal wants to debunk negative perceptions of financial products in Indonesia

Historically, Indonesians have been skeptical about buying insurance policies. But that seems to be changing, according to a recent study by McKinsey. The firm says a segment of the nation’s urban consuming class – roughly 20 million people – is now breaking away from the typical Indonesian profile, and spending on products related to financial protection as well as auto and health insurance.

This is good news for people like Ivan Sunandar, founder and business development manager of Cekpremi, one of Indonesia’s newest online insurance portals that lets users compare insurance products and make purchases through the site. The company has only been running for three months, but already it has partnered with several big local insurance firms, including ACA Asuransi, Adira Insurance, Zurich, MNC Insurance, Sinar Mas Asuransi, and more.

Apart from selling and advising, Sunandar says his company also aims to further debunk existing negative perceptions of insurance in Indonesia. The reason for mistrust toward financial products in the archipelago, according to him, is that local insurance agents are not well-trained and there is a low standard of industry regulation.

The local insurance landscape

“Insurance can really help people to minimize their losses should something bad actually happen,” explains Sunandar. “Indonesia, as the fourth most populous country, already offers us a tremendous opportunity and given the perception of insurance products by society, it provides us with a huge challenge as well.”

Cekpremi is not the first to come out with this idea in Indonesia. The firm competes with other local players like PremiKita, Asuransi88, AsuransiKITA, and RajaPremi. Indirectly, it also competes against financial comparison sites like CekAja and ArturDuit. However, Sunandar says that he sees these companies less as competitors and more as partners who can help educate Indonesians about insurance and other types of financial products.

See: CekAja helps Indonesians compare and apply for financial products

Sunandar says that his company has been authorized to sell insurance for only three months. However, given the short amount of running time, he says he is grateful to already have a bit of traction in the market. At the moment, Cekpremi has 2,500 registered users. Sunandar says he measures this number by totaling the clients who call in directly and entering their details into the website to get insurance quotations.

Riding a new wave of middle class spending

Clients do not pay additional fees for Cekpremi’s service, according to Sunandar. The price quoted is the actual premium of an insurance product from the insurance companies themselves. Cekpremi monetizes via commissions it collects from the insurance companies for each client it delivers. Sunandar claims the amount varies depending on the type of product the client is shopping for, but did not share the details on how much Cekpremi charges its insurance providers.

“Our product is our service. We always try our best to meet our clients’ expectations and give them a solution that they really need. Our website is designed so people can have an easy time getting their necessary insurance products,” says Sunandar.

Regarding market size and growth, Sunandar is encouraged by data from the Indonesian General Insurance Association that shows general insurance penetration is steadily on the rise in Indonesia. The firm states that by the third financial quarter of last year, the local general insurance industry (excluding life insurance) made revenue of Rp 38.97 trillion (US$3.1 billion).