OJK Reveals Indonesian Youth Still Hesitant to Take Up Insurance

Yogyakarta, CNBC Indonesia — Indonesia’s insurance penetration remains lower than ASEAN countries such as Singapore, Malaysia, the Philippines, Thailand, and Vietnam. According to data from the Financial Services Authority (OJK), Indonesia’s insurance penetration stood at 2.7% in 2025.

Nevertheless, public enthusiasm for learning about insurance was evident at the Educational Class Jogja Financial Festival 2026 titled ‘Young and Wealthy, Old and Prosperous’ held at Jogja Expo Centre (JEC) in Bantul on Saturday, 23 May 2026.

The event featured Sumarjono, Head of the OJK’s Insurance and Supporting Services Supervision Department; Handojo G Kusuma, Chairman of the AAJI Department for Domestic and International Inter-Institutional Cooperation, Regulators, and Stakeholders; and Heru Handayanto, Financial Director of Indonesia Financial Group (IFG).

Sumarjono stated that low insurance penetration in Indonesia is influenced by several factors, including public unawareness of risks affecting livelihoods and past claims payment issues within the insurance industry.

However, he noted that increased access to information has made it easier for the public, including young people, to learn about insurance.

‘If you want to be secure in old age, preparation and planning must start now,’ he said.

Handojo explained that insurance operates on a mutual aid principle, where communities support each other when members face misfortunes.

‘We pool contributions together to help those in need,’ he said.

He added that insurance literacy has risen from around 36% in 2024 to approximately 45% currently.

‘So people’s experience with insurance is improving,’ he noted.

However, insurance inclusion remains relatively low despite increasing from 12% to 28%.

‘When compared to the 45% awareness rate, inclusion is still low. People understand insurance but think, “I’ll buy it later”’, he said.

Heru Handayanto highlighted the importance of insurance as a safeguard against risks like illness and accidents.

‘Ensuring readiness when risks occur means you’re protected if anything happens,’ he said.

He also debunked the notion that insurance is always expensive.

‘IFG’s Lifesaver product, for instance, covers sports injuries, sprains, and physiotherapy for under Rp50,000,’ he said.

During the discussion, students cited reasons for young people’s reluctance to take up insurance, including complex terminology and the perception that insurance offers lower returns compared to investment instruments like stocks.