Surge in Health Insurance Claims Overtakes Life Insurance in Indonesia, Driven by Global Warming Impact

Insurance Business (photo: Vlad Deep - Unsplash)

The health insurance industry in Indonesia is experiencing remarkable growth, with a notable increase in health insurance claims over the past two years, surpassing claims related to life insurance due to death. This information comes from the Indonesian Life Insurance Association (AAJI).

Edy Tuhirman, the Head of Operation of Excellence, IT & Digital (Customer Centricity) at AAJI, provided an overview stating that, in general, claims and benefits for the third quarter of 2023 amounted to IDR 122.46 trillion, distributed among 7.69 million people. Life insurance claims, in general, have decreased by 4.4% compared to the same period last year.

In contrast, death-related claims have seen a decline of 9.7%, reaching IDR 8.04 trillion. Edy attributed this decrease to the post-COVID-19 normalization.

However, there has been a noteworthy increase in health claims paid by the life insurance industry, soaring by 32.9% to IDR 15.24 trillion. For the first time, the value of health claims has surpassed claims related to death.

Expressing concern, Eddy stated, “This is concerning for us; hopefully, people out there become more aware of health issues. This is the first time after two years.”

Regarding this phenomenon, Eddy highlighted several factors contributing to the rise in health claims, including diseases accompanying the post-COVID-19 period and the impact of global warming.

“It seems we have never conducted a study on the impact of COVID-19 on our society like this. What are the effects on people who have been vaccinated or have had COVID?” he questioned.

Additionally, the phenomenon of global warming and pollution is also driving diseases such as dengue fever and Acute Respiratory Infections (ARI).

“ARI still contributes significantly to these claims. This is the influence of global warming. And ARI can have a long claim duration. Coughing can now last for 2 weeks,” shared Eddy.

Despite the increase in health claims, premiums are reportedly still insufficient to cover the total claim amount. This is evident from the claims payment ratio to premium income, which has already reached 122%.