Family Income, Saving and Potential Demand for Microinsurance Policy in the Greater Jakarta Area (Jabodetabek)

Abstract

The gap between microinsurance supply and demand mechanism has impeded the prosperity improvement for low income people in informal sectors in Indonesia. From the supply side, which is driven by insurance companies, there is an urgency to find the best scheme, both technically and professionally. On the other hand, from the demand side, the willingness and purchase ability of urban people for risk protection by having insurance products should be improved. This is an exploratory study, aiming to evaluate and measure the gap between supply and demand mechanism for microinsurance products (focused on life insurance and its derivatives), detects the factors related to the gap mid problems in income, and how government interventions can solve these problems. Multivariate and qualitative analysis (FGD and IDI) were employed and stratified clustered sampling technique was used in the study.

Keywords: social security provision, microinsurance, insurance industry, government regulation, Indonesia

JEL Classification: D31, G22, G23