Insurers tackle low app usage with embedded options

App penetration remains low, pushing firms to embed coverage into daily platforms.

Indonesia’s digital insurance market is growing steadily, but insurers continue to face a major challenge: low user uptake of direct-to-consumer insurance apps. According to Indrawati Darmawan, Chief Financial Officer at PT Asuransi Central Asia, embedded insurance is proving more effective in driving reach and relevance.

“We are talking about total distribution. One is the corporate distribution, where we still go directly to the customers, because it's tailor-made insurance,” Darmawan said during an interview at a recent insurance event. “Retail—the direct buy from the app—is still below penetration.”

To overcome this, insurers are embedding insurance products into widely used platforms like Shopee and Tokopedia. “Most of the time it is done through embedded insurance into daily apps,” she said, adding that mobile platforms also support digital payments and enable automated claims and analytics.

Microinsurance and mobile protection products are being made available through partnerships with digital ecosystems that already cater to large user bases. “We can purchase mobile insurance through our apps or work together with digital apps such as COVID or Shopee, which cater more to people with lower technology familiarity,” Darmawan explained.

Despite the momentum, regulatory gaps remain a concern. “The regulations are still catching up,” she said. “You have to get approval for all digital products from OJK,” referring to Indonesia’s financial services authority. The Ministry of Communications must also approve digital distribution channels.