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Growth opportunities in Indonesia

Elizabeth Diffin

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A burgeoning population and young people in need of coverage make this country fertile ground for advisors.

When it comes to considering emerging markets around the world, Indonesia should not be overlooked. At least that’s what financial advisors who work in the country believe, citing its position as the fourth-most populous country in the world.

“Low penetration rates and a growing, large population make Indonesia the market with the most potential in Southeast Asia,” said Herold Chen, CFP, a seven-year MDRT member from Jakarta, Indonesia. “Healthy economic growth and rising disposable incomes will continue to boost demand for insurance products in many markets, including Indonesia.”

But Glen Alexander Winata, a five-year MDRT member from Jakarta, said that while demand is growing along with the population, an understanding of the value of insurance products is still lacking.

“The level of awareness of Indonesians about insurance is still pretty low, which means the opportunity for this market is still really high,” he said. “The main issue we have in Indonesia is they think insurance is not really important.”

Government steps in

In 2011, the government implemented a new national social security system, Sistem Jaminan Sosial Nasional (SJSN), that provides basic coverage for all Indonesians, in both the formal and informal sectors. This regulation helped Chen define his target market, choosing to focus on higher-income individuals who would like the additional benefits and better services that come through private insurers.

“SJSN has radically changed the social protection paradigm from 2011 until now,” he said.

Similarly, recent changes in the health insurance industry led many people to upgrade their old policies — and become Winata’s clients in the process. In his practice, Winata emphasizes “life risk,” which is unrelated to the economy or other factors.

There is no rich man when facing illness, because in a moment, one's wealth might be gone to treat his illness.
— Herold Chen

He particularly remembers a young father of three who purchased an insurance policy, largely because his brother had bought one. A year later, the man had a heart attack in the middle of the night and had to undergo angioplasty. He recovered, but was diagnosed with brain cancer just a month later and died quickly thereafter.

“Their family is well-supported because of the insurance plan he got,” Winata said. “This story opens so many eyes that life risk can happen to anyone.”

Chen has found that just because someone has a lot of coverage, it doesn’t mean it is sufficient coverage. He recalled a referral he received in the early years of his career, a businesswoman who had already purchased nearly 20 insurance policies. But after thoroughly reviewing all the policies, Chen discovered she had a protection gap: critical illness insurance.

He encouraged her to purchase the coverage, and a few years later, when she was diagnosed with breast cancer, that insurance helped cover the high costs of her treatment.

“There is no rich man when facing illness, because in a moment, one’s wealth might be gone to treat his illness,” Chen said. “Every productive person must prepare their financial life plan to be ready for any condition that might happen. Insurance becomes one of the easiest and smartest strategies to support a family’s financial life.”

But convincing clients of that need is often difficult. “The most typical challenge is, ‘Why should I believe you?’” Winata said. “Trust is the most important thing. I believe if I give them the best service from the beginning, they will become a return customer.”

He also uses MDRT as a way to establish his credentials. “I tell my clients that I am an MDRT member,” he said. “There are only about 2 percent of MDRT members in the world, and I am one of them. That builds clients’ trust instantly.”

Chen also believes that sincerity is essential, helping clients find the appropriate coverage for their unique needs, not just whatever will make him the most money. When he encounters objections, he considers it a chance to share additional information and emphasize how the product will help them.

We need to be more creative and develop technology tools to support the business.
— Glen Alexander Winata

Of course, Indonesia’s growing population also represents the emergence of a new generation of young people. When Winata first started in the insurance industry, the majority of agents and clients were baby boomers and Generation X. But now he notices that more millennials are buying insurance, which means advisors need to keep up with the changing times as well.

“We as insurance agents need to be more creative and develop technology tools to support the business,” he said.

Chen agrees. “Growing demands for technology-driven solutions will push insurance companies to enhance digital capabilities in future trends,” he said. “Companies will increasingly use digital technology to reach new clients, upsell insurance services to existing ones and enhance digital interfaces between sales agents and clients. Companies will also take further steps to enhance the online client experience and use technology to deliver simpler, faster and more affordable insurance processes.”

Contact Herold Chen at

Contact Glen Alexander Winata at


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