The Financial Services Authority (OJK) is developing Sharia Micro Insurance as a part of micro insurance development that was proclaimed by OJK in October 2013.
In the Friday’s OJK press conference, OJK mentioned the development of micro insurance is a part of the financial inclusion program and this sharia micro insurance made is based on sharia principal that is affordable by low income society.
Low income society also needs protection of the financial risk that it faces as an impact of a disaster, for example self-accident, sickness and nature disaster.
Moreover, this society is relatively more vulnerable to the impact caused by that disaster, because in general it does not have enough money to face the unpredictable incident or disaster.
It is mentioned that by considering the majority of Indonesians which are Muslims, this development of sharia micro insurance is hoped to be the anchor to reach the financial inclusion in an insurance sector.
Some insurance companies have actually had a sharia insurance product with a relatively small contribution. However, the rate and type of sharia micro insurance product that was mentioned is very limited.
Besides that, the marketing of sharia insurance product also faces a lot of problems such as the distribution line that still cannot reach some of the low income society and the society understanding level (literation) on sharia insurance that is still insufficient.
To overcome those problems, OJK sets a sharia micro insurance development program as one of the priorities in 2014.
In this sharia micro development program, OJK works with all of the stakeholders to provide sharia micro insurance products with affordable premium rate and maximum benefits, distribute in efficient ways, educate for the society and provide supporting rules that are needed.