The Anomaly of Insurance's Significant Potential in the Business World
Elsatekno.com- The
Anomaly of Insurance's Significant Potential in the Business World-In the
financial hierarchy, insurance occupies the foundation, offering protection of
wealth to safeguard future prosperity. The insurance's placement at the top
priority is not detached from the benefits derived by policyholders.
Insurance, in its core, is a
contract between the insurer as the underwriter and the insured as the
beneficiary. In insurance, the underwriter provides indemnification or
replacement when something adversely affects the beneficiary or their property
according to the agreed contract.
In essence, insurance companies
offer indemnification to beneficiaries when undesirable events occur.
Conversely, insured individuals must fulfill their obligations, which is to pay
insurance premiums according to the contract.
The term "Insurance" is
no longer foreign to many people. Despite the popularity of the term
"Insurance," the majority of Indonesian citizens still do not have
insurance. According to data from the Financial Services Authority (OJK), the
understanding of the Indonesian public about insurance and its use is still
limited.
This issue is evident from the
penetration or ownership of Insurance by the Indonesian public. According to
data from OJK, as quoted by Bisnis Indonesia in July 2021, the insurance
penetration rate in 2019 reached 2.81%. This figure increased to 2.92% in 2020
and 3.11% in June 2021.
This situation is due to the lack
of understanding among the public when purchasing insurance and the claims
process for the insurance in question. Another reason is the variety of
insurance products offered by insurance companies. As a result, many people,
particularly those new to insurance, are confused about the benefits of each
insurance product offered
Insurance is no longer separable
from life due to its increasingly frequent development. Whether consciously or
unconsciously, insurance is one of the only financial instruments that can
provide protection or guarantee income and livelihood for individuals and
organizations from unknown risks that may come at any time.
Insurance has now become one of
the best alternatives for saving and financial planning, as well as a long-term
investment tool. Insurance is not only a tool for spreading business risk but
also provides benefits in protecting personal (life), assets (property), and
liabilities. As a result, insurance must grow rapidly and widely throughout
Indonesia. As stated by OJK, the penetration of the insurance industry in
Indonesia is still very low.
This statement is indeed an
anomaly in the business world given the significant potential of insurance. The
ratio of the business world and the public insured with this potential is still
very low. This indicates that insurance is not yet popular, not well
understood, and not well received by a large portion of the public due to the
relatively low level of insurance awareness.
Therefore, it is a challenge for
those concerned, as the public's general perception of insurance and its
benefits is not yet widely known, and there is still the perception that
becoming an insurance customer adds to the burden of costs and has a negative
image, especially in relation to the complicated claims process.