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Indonesia: Takaful operators urged to target millennials for growth

Source: Middle East Insurance Review | Jan 2019

The Financial Services Authority (OJK) has urged shariah insurance businesses to target millennials in order to expand the market.
 
The approach to take includes innovation and transformation of both products and infrastructure, reported Indonesian daily Republika.
 
Mr Moch Muchlasin, director of shariah non-bank financial institutions at the OJK said the opportunities for expansion of the Islamic economic sector are very broad through the growth of takaful.
 
The growth of Islamic insurance assets was quite high at around 25% from 2012 to 2017. In 2017, Islamic assets grew by 21.96% year on year. However, business growth has slowed. 
 
“To strengthen shariah insurance, it is necessary to tap the huge potential market as represented by millennials, who are currently being targeted by many parties,” said Mr Moch who was speaking at the Shariah Insurance Potential and Innovation seminar held by the Islamic Insurance Society (IIS) in Jakarta in December.
 
According to projections by the Central Bureau of Statistics, millennials in 2020 could form 64.5% of the total population.
 
“Now millennials are more interested in investment than protection, so this is our challenge – to make attractive protection products,” Mr Moch said.
 
He said the OJK had worked with stakeholders to increase the market share of takaful. The actions taken included improving the quality of human resources and widening investment opportunities in the Islamic sector.
 
“We need to sit back to discuss how to effectively educate and socialise millennials, and also to carry out digital transformation,” he said.
 
He suggested that as millennials are avid internet users, insurers need to provide them a fast and easy platform to access takaful. Addressing insurers he said, “It would be better for you to develop applications that facilitate access, starting from the registration process to premium payments and claims.”
 
IIS chairman Abdul Mulki agreed that various efforts can be made by the industry to meet needs such as digitalisation. Also important is the grooming of competent millennial human resources in the field of Islamic insurance. He said the IIS is serious about training quality human resources to expand the pool of shariah insurance experts. M 
 
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