Vehicle Insurance Can Accumulate Trillions of Rupiah Annually

The Financial Services Authority (OJK) is currently drafting regulations to make motor vehicle insurance mandatory.

Ogi Prastomiyono, Executive Head of Supervision for Insurance, Guarantee, and Pension Funds at the OJK, stated that currently, motor vehicle insurance is voluntary.

However, with the enactment of the Law on the Development and Strengthening of the Financial Sector (UU PPSK), vehicle insurance may become mandatory for all car and motorcycle owners. The government is currently formulating implementing regulations.

"It is expected that the government regulation regarding mandatory insurance will be in accordance with the Law at the latest within 2 years since the PPSK, meaning that by January 2025, every vehicle will have TPL [third-party liability insurance]," said Ogi, as reported by *CNBC Indonesia* on Tuesday (July 16, 2024).

After the regulation comes into effect, premiums or contributions collected by the motor vehicle insurance industry will certainly increase significantly.

According to data from the Indonesian General Insurance Association (AAUI), before the mandatory regulation, from 2019 to 2023, the motor vehicle insurance industry had already been able to collect premiums recorded between Rp 14 trillion and Rp 19 trillion per year.

Furthermore, based on the *Roadmap Perasuransian Indonesia 2023-2027* from the OJK, the insurance industry is one of the sources of funds for business development and national development.