The latest report from GlobalData looks at insurance trends in Indonesia;
Personal accident and health (PA&H) insurance in Indonesia is expected to grow at a strong compound annual growth rate (CAGR) of 13.4% from IDR38.6 trillion ($2.4 billion) in 2025 to IDR63.8 trillion ($4.0 billion) in 2029, in terms of gross written premiums (GWP), forecasts GlobalData, a leading data and analytics company.
GlobalData’s Insurance Database reveals that the share of PA&H insurance in the total insurance industry of Indonesia is projected to grow from 13.6% in 2025 to 16.7% by 2029, in terms of GWP. PA&H insurance is projected to grow by 14.2% in 2025, propelled by high demand for private health insurance products and rising premium rates.
Manogna Vangari, Insurance Analyst at GlobalData, comments: “The Indonesian PA&H insurance industry has witnessed double-digit growth since 2022 and is anticipated to sustain this upward trend over the next five years. This robust expansion is driven by increased health and financial awareness, which has stimulated demand for health insurance products. Furthermore, adjustments in premium prices to counteract inflation, coupled with a revival in the tourism industry, are expected to further bolster the growth of PA&H insurance.”
According to the Indonesian Life Insurance Association, Indonesians will find it difficult to afford health insurance in the coming years due to double-digit medical inflation and increasing healthcare expenses. The escalating expenses of healthcare are driving companies to raise premiums in order to maintain sufficient coverage.
Additionally, insurance companies are focusing more on small and medium-sized employers as assessing risks for larger employers poses difficulties. In their attempts to control increasing medical expenses, insurers face challenges from hospitals and healthcare providers that suggest unwarranted services, leading them to implement reimbursement payment methods instead of cashless options to tackle these problems.
According to GlobalData, general PA&H gross claims are expected to grow at a CAGR of 10.9% over 2025–29 from IDR8.6 trillion ($535.9 million) in 2025 to IDR13.1 trillion ($816.3 million) in 2029.
Vangari adds: “The rising claims ratio trend is partially attributable to medical inflation in the country, which is mainly driven by soaring expenses for pharmaceutical ingredients and medical devices. Additionally, the devaluation of the local currency worsens pricing challenges, as most pharmaceutical raw materials and medical devices are sourced from abroad.”
The government and the Financial Services Authority are working on a Circular Letter (RSEOJK) about health insurance to address rising costs and the claims-to-premiums ratio. This RSEOJK will create a system for coordinating benefits among health insurance offerings from insurance companies, Sharia insurance providers, and the Health Social Security Administration Agency.
This regulation will require health insurance policies to include a co-payment for outpatient services, which must be at least 10% of the total claim amount. The co-payment aims to reduce the overuse of medical services and lower claims costs for insurers.
The growth of tourism is also driving the increase of PA&H insurance in the nation. As reported by the Central Statistics Agency, Indonesia experienced a significant rise in tourism, with international tourist arrivals reaching an all-time high of 12,658,048 from January to November 2024—the highest number recorded in the last five years. This marks a considerable 20.17% rise compared to the previous year. By the end of December 2024, the total number of foreign tourist visits had reached 13.9 million.
Vangari concludes: “The PA&H insurance industry is still grappling with obstacles; nonetheless, the shift towards digitalization and an increase in public awareness are expected to foster its growth in the coming five years. Insurers are progressively adopting technology to create more flexible products that meet market needs. Furthermore, the implementation of stricter regulations is anticipated to reinforce the industry’s stability.”
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