Yogyakarta, CNBC Indonesia \u2014 The insurance industry notes that public\nunderstanding of insurance has improved in recent years. However, public\ninterest in purchasing insurance products remains relatively low.<\/p>\n
Handojo G Kusuma, Chairman of the AAJI Department for\nInter-Institutional Cooperation, Domestic and International Regulators\nand Stakeholders, stated that insurance literacy has risen\nsignificantly.<\/p>\n
\u201cInsurance literacy was around 36% in 2024 and has now risen to\napproximately 45%,\u201d Handojo said during the Educational Class at the\nJogja Financial Festival 2026 titled \u2018Young and Wealthy, Old and\nProsperous\u2019 at Jogja Expo Centre (JEC) on Saturday (23\/5\/2026).<\/p>\n
He added that the rise in literacy indicates improved public\nunderstanding of insurance.<\/p>\n
\u201cPeople\u2019s experience with insurance is now improving,\u201d he said.<\/p>\n
Nevertheless, insurance inclusion remains relatively low despite\nincreasing from around 12% to 28%.<\/p>\n
\u201cBut compared to 45% awareness, inclusion is still low. People\nunderstand insurance but say, \u2018I\u2019ll buy it later\u2019,\u201d he said.<\/p>\n
This aligns with data from the Financial Services Authority (OJK),\nwhich shows Indonesia\u2019s insurance penetration still lags behind ASEAN\npeers such as Singapore, Malaysia, the Philippines, Thailand, and\nVietnam. Indonesia\u2019s insurance penetration rate stood at 2.7% in\n2025.<\/p>\n
Handojo explained that insurance operates on a mutual aid concept,\nwhere society helps each other when a member faces misfortune.<\/p>\n
\u201cWe pool money together to help those affected by disasters,\u201d he\nsaid.<\/p>\n
He also noted that taking out insurance at a younger age is typically\ncheaper due to lower premiums and insurers being more willing to accept\nthe risk.<\/p>\n
He stressed that insurance plays a vital role in safeguarding family\nwelfare, particularly when the breadwinner faces hardship.<\/p>\n
\u201cIf the breadwinner falls ill or cannot work, the whole family\nsuffers financially. That\u2019s why insurance is crucial,\u201d he said.<\/p>\n
During the discussion, several students cited reasons why young\npeople remain reluctant to buy insurance despite understanding the\nimportance of financial protection.<\/p>\n
Some cited the complexity of insurance terminology, while others view\nit as lacking returns, preferring investment instruments like shares\nwhen they have spare funds.<\/p>\n
The event also featured Sumarjono, Head of OJK\u2019s Insurance and\nSupport Services Supervision Department, and Heru Handayanto, Chief\nFinancial Officer of Indonesia Financial Group (IFG).<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/aaji-many-understand-insurance-but-remain-reluctant-to-buy-1780351692", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }