Indonesia Considers Mandatory Disaster Insurance Amid Rising Natural Disasters

Growing Need for Disaster Insurance

Indonesia is actively exploring the implementation of mandatory disaster insurance to protect its population and assets from the increasing frequency and severity of natural disasters ¹

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Source 4

https://keuangan.kontan.co.id/news/asuransi-wajib-bencana-dinilai-perlu-segera-diterapkan-ini-alasannya

. This consideration comes as the country faces significant losses due to various disasters, with insured losses in 2025 estimated at US$107 billion (Rp1.7 quadrillion) globally, partially attributed to Indonesian events ²

Source 2

https://finansial.bisnis.com/read/20251217/215/1937427/asuransi-tanggung-kerugian-global-rp17-kuadriliun-akibat-bencana-alam-termasuk-banjir-sumatra

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Industry Capacity and Risk Management

The Indonesian insurance industry has expressed confidence in its ability to handle potential claims from natural disasters. The General Insurance Association of Indonesia (AAUI) stated that the industry's financial strength remains unaffected by recent disasters in Aceh and Sumatra, estimating total claims at Rp567.02 billion ³

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Key Statistics:

• Total estimated insured losses for Sumatra disasters: Rp567.02 billion
• Property claims: Rp492.52 billion
• Vehicle claims: Rp74.49 billion

Expert Opinions and Industry Preparedness

Industry experts believe that the insurance sector is relatively prepared for implementing mandatory disaster insurance, citing existing infrastructure like PT Asuransi MAIPARK Indonesia, which is owned by all national general insurance companies ⁴

. The reinsurance backup is considered robust, with both domestic and international reinsurers prepared for potential claims ³

Source 3

https://finansial.bisnis.com/read/20251217/215/1937308/aaui-pastikan-klaim-bencana-aceh-sumatra-tak-goyang-kekuatan-finansial-industri

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Challenges and Future Directions

While the industry shows readiness, experts emphasize the need for increased public awareness about disaster insurance importance and structured risk management practices. The proposed mandatory insurance scheme is seen as a crucial step in enhancing financial resilience against natural disasters, supported by the legal framework provided by the Financial Sector Development and Strengthening Law (UU P2SK) ⁴

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