AXA Insurance Advocates for Premium Subsidies to Enhance Agricultural Insurance
JAKARTA, Indonesia – In a significant move towards advancing agricultural insurance, PT AXA Insurance Indonesia has voiced the necessity for premium subsidies, particularly for parametric insurance products aimed at farmers. This initiative comes in light of the rising costs associated with such insurance products, which many farmers find challenging to afford.
Need for Collaboration
Rudy Laoh, the Head of Retail Claim, Product Proposition, and Green Business at PT AXA Insurance Indonesia, emphasized the pressing need for collaboration between various stakeholders, including the government and the Indonesian General Insurance Association (AAUI). "We require the involvement of stakeholders because farmers need premium subsidies for agricultural insurance," Laoh stated. He noted that without these subsidies, affording parametric insurance would prove difficult for many in the farming community.
Laoh further articulated that the introduction of premium subsidies could pave the way for sustainable agricultural insurance projects. "Based on our experience, farmers are more inclined to adopt insurance when subsidies are available," he added during a discussion with Kontan on Friday, April 4. ## Prospects for Agricultural Insurance
Despite the challenges, Laoh remains optimistic about the prospects of agricultural insurance in Indonesia, which boasts a vast agrarian landscape. He highlighted AXA Insurance’s commitment to collaborating closely with AAUI and governmental bodies to promote agricultural insurance effectively.
AXA Insurance has been active in developing agricultural insurance products since 2018. Laoh mentioned that their parametric insurance offerings have progressed through pilot projects conducted in Karawang and South Sulawesi, generating approximately IDR 1 billion (around $65,000) in premium income by the end of 2024. ## AAUI’s Strategic Roadmap
Reflecting on the industry’s future, the AAUI recently launched its Roadmap for Agricultural Insurance Development for 2025–2030. Budi Herawan, Chairman of AAUI, noted the industry’s eagerness to penetrate the agricultural insurance ecosystem to explore new opportunities. He acknowledged the significant potential of agricultural insurance against the backdrop of Indonesia’s ongoing struggle for food self-sufficiency.
For effective implementation, the insurance industry plans to fully roll out agricultural insurance by the second semester of 2025, focusing on parametric insurance schemes. Herawan underscored the need for robust risk mitigation strategies through insurance to support Indonesia’s food security goals.
Conclusion
The call for premium subsidies by AXA Insurance reflects a broader commitment within the insurance sector to enhance agricultural insurance uptake among farmers. As dialogues continue between insurers, government entities, and farming communities, the foundation is being laid for a more sustainable and accessible agricultural insurance landscape in Indonesia. The collaboration aims not only to foster economic resilience among farmers but also to contribute to the nation’s overarching food security objectives.
As the industry gears up for future developments, AXA Insurance remains committed to providing relevant agricultural insurance products, awaiting feedback on effective mechanisms to engage local farmers.
