Indonesia's Mandatory Disaster Insurance Plan Revival Urged by AAUI

High Disaster Risk Environment

Indonesia, being a region prone to various natural disasters, is seeing renewed calls for implementing a mandatory disaster insurance program. The Indonesian General Insurance Association (AAUI) has been at the forefront of this initiative, emphasizing the country's vulnerability to catastrophic events. Recent severe flooding in Sumatra has brought this issue back into focus, highlighting the urgent need for comprehensive disaster risk management mechanisms.

Historical Context and Current Developments

AAUI Chairman Budi Herawan revealed that discussions regarding mandatory disaster insurance have been ongoing for several years. However, progress has been hampered by a pattern where the government tends to respond reactively rather than proactively to disaster events. Herawan expressed the need to revive these discussions to move towards implementation. The current situation in Indonesia, with its frequent natural disasters, makes a strong case for such insurance.

Industry Perspective and Future Prospects

The insurance industry views mandatory disaster insurance as a critical component of national risk management. By making such insurance compulsory, the financial impact of disasters on both individuals and businesses could be significantly mitigated. The AAUI believes that reviving this plan could provide a more structured response to disasters, ensuring that affected parties have financial protection.