Friday, 19 August 2022

OVO partners Prudential to enter underserved Indonesian life insurance market

5 min read

Jakarta, April 28, 2021 -- PT Visionet Internasional (OVO), the leading digital payment, rewards, and financial services platform in Indonesia, and PT Prudential Life Assurance (Prudential Indonesia), Indonesia's leading life protection provider, today launched Asuransi Jiwa Kumpulan Syariah PRUTect Care (PRUTect Care - Hospital Cash), a  digital sharia life insurance product with affordable contributions (premiums). The product is provided by Prudential Indonesia through insurance broker PT Salvus Inti and can be easily accessed through the OVO digital application. 

Indonesia remains a significantly underinsured market despite being ASEAN’s largest economy and registering robust economic growth averaging over five percent in the past three years prior to the COVID-19 pandemic.  Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan) noted that as of 2020, insurance penetration in Indonesia, which has a population of around 270 million, was less than four percent.

A survey conducted by OVO in several major Indonesian cities found that the lack of insurance coverage was influenced by the perception that claims processes were difficult and time-consuming. Many respondents also cited the financial burden of having insurance. Interestingly, 47 percent or nearly half of the respondents expressed an interest in buying sharia-based life insurance in the near future. 

This interest in sharia-based insurance reflects the rapid rise in demand for sharia-based services and products in Indonesia. According to The State of Global Islamic Economy (SGIE) Report 2020/2021, in 2020 Indonesia was the world’s fourth largest sharia economy, rising from tenth position in 2018 within the space of just two years.  

OVO CEO Jason Thompson said, “In line with OVO’s commitment to serving the Indonesian people, OVO is excited to work with Prudential as a global leader in insurance. This launch marks OVO’s entry in the life insurance and sharia insurance space. By combining OVO’s strong digital reach and capabilities together with Prudential Indonesia’s expertise in insurance, we can make sharia life insurance affordable and easily accessible for Indonesians all over the country, enabling them to protect themselves and their loved ones amid the country’s low penetration rates.”

Jens Reisch, President Director of Prudential Indonesia, observed that the ongoing COVID-19 pandemic has increased Indonesians’ awareness of the importance of life insurance protection, but that many individuals remain reluctant to purchase insurance due to barriers of affordability and accessibility. 

PRUTect Care - Hospital Cash Insurance product is designed to offer users a highly affordable, highly accessible, sharia-compliant life insurance product which can be easily purchased on the OVO app with just the swipe of a finger. Users further enjoy a choice of monthly or yearly contribution payment schemes, starting from just around IDR5,000 (US$0.34) per month. The product provides comprehensive benefits to the customers, including basic death-benefit and other preferred protections, such as daily hospital cash (non-ICU-Intensive Care Unit), daily hospital cash (ICU), permanent disability due to total accident benefit, death benefit due to infectious diseases and death benefit due to accident. 

“The launch of PRUTect Care - Hospital Cash Insurance reflects Prudential's and OVO’s joint vision to create a healthier and more prosperous society, as well as our commitment to providing affordable and easily accessible life protection products amidst low insurance penetration and financial literacy in Indonesia. The realization of our strategic partnership with OVO through PRUTect Care - Hospital Cash will enable Prudential Indonesia to reach more users, meet their continuously evolving needs for protection, and help them to get the best out of life,” saidReisch.

In 2019, Prudential Indonesia established a long-term partnership with OVO to expand access to life insurance for the Indonesians, reaffirming OVO’s position as a partner of choice in Indonesia’s fast-growing financial services sector. This arrangement gives Prudential Indonesia access to OVO’s large user base nationwide, spanning all of Indonesia’s 34 provinces.

Besides insurance, OVO also offers investment and lending products, all of which are supported by its seamless digital payment capabilities as part of OVO’s vision of accelerating financial inclusion.

In early 2020, OVO and Prudential Indonesia collaborated to provide premium-free accident and COVID-19 life insurance to help Indonesians at the onset of the COVID-19 pandemic. Approximately 222,000 individuals registered through the OVO platform during the program period, which ran until 31 May 2020.


Re-disseminated by The Asian Banker

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