Indonesia

Overview

Indonesia is the world’s second most at-risk country from natural disasters. Climate change is likely to lead to an increase in extreme events such as floods and droughts, as sea levels and temperatures rise. Coastal communities are particularly vulnerable, as tropical storms and tsunamis threaten lives and livelihoods.
UNDP’s Insurance and Risk Financing Facility is working with government, industry and international partners to build financial resilience in coastal communities through innovative insurance solutions.

Main Natural Hazards

Tsunami, Earthquake, Flood

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Source:

https://drmkc.jrc.ec.europa.eu/inform-index/INFORM-Risk/Country-Risk-Profile}

Insurance penetration

2.72% (2022)

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Source:

https://www.statista.com/statistics/1014795/indonesia-insurance-penetration-rate/}

Number of insurance providers

58 life insurance companies, 78 non-life insurance companies and 8 reinsurers

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Source:

https://www.statista.com/statistics/1013698/indonesia-number-of-insurance-companies-by-type}

% Workforce engaged in agriculture

29% (2022)

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Source:

https://data.worldbank.org/indicator/SL.AGR.EMPL.ZS}

Multidimensional poverty

3.6% (2017)

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Source:

https://hdr.undp.org/system/files/documents/hdp-document/2023mpireporten.pdf}

% of population covered by inclusive insurance products

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Source:
The Microinsurance Network, Landscape of Microinsurance 2023, Based on target population estimate for Indonesia of 224,168,711 people https://microinsurancenetwork.org/resources/the-landscape-of-microinsurance-2023}

Biodiversity ranking

#2 out of 239 countries and territories (2023)

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Source:

https://worldrainforests.com/03highest_biodiversity.htm}

Small business % contribution to workforce

96.9% of total employment (2019)

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Source:

https://www.oecd-ilibrary.org/sites/13753156-en/index.html?itemId=/content/component/13753156-en}

Our projects

Reducing vulnerability in coastal communities with coral reef insurance
With funding from the Ocean Risk and Resilience Action Alliance (ORRAA) and the UK’s Blue Planet Fund, UNDP is rolling out an innovative coral reef insurance initiative in Indonesia, in cooperation with industry partner Swiss Re. The project builds resilience in coastal communities by protecting coral reefs, which are key drivers of tourism and local income and act as powerful buffers against tropical storms. Protecting and restoring these reefs safeguards biodiversity, reduces coastal communities’ vulnerability to climate risks, and helps foster sustainable growth in the Blue Economy.

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Incentivizing the development of new insurance products and services across emerging economies
UNDP’s Insurance Innovation Challenges are powering a new generation of insurance products and services tailored to underserved households and businesses in developing economies.
- Active in 25 countries, with an investment of over US$2.1 million
- Addressing specific barriers and opportunities to scale financial protection, with a particular focus on women, SMEs and other vulnerable groups
- Creating market opportunities for insurance providers and safeguarding development.
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UNDP is layering a project focused on developing Indonesia’s blue economy with a project to develop parametric reef-insurance that protects and restores coral ecosystems and the communities that depend on them.
- Supporting the Ministry of Marine Affairs and Fisheries in drafting relevant regulations for project pilot to succeed
- Supporting the Ministry of Finance - Fiscal Policy Agency with the review of existing DRF strategy and expansion of implementation to local government level