Jakarta. Insurance analyst Tri Joko Santoso is having doubts about the upcoming mandatory third-party liability insurance, even saying that the policy will likely only benefit state-owned insurers.

The Financial Services Authority or OJK’s decision to require drivers to pay for third-party liability vehicle insurance has sparked concerns among experts and the general public. This insurance seeks to financially protect drivers if they are responsible for damages or injury of another person in an accident that they have caused. It will also apply to all vehicles, including motorbikes and cars. There are still a few months before the policy comes into force in January, but the program has seen many disapprovals. 

“It would be hard to say that the overall industry would benefit from this policy. All compulsory insurance is usually given to the government for handling. So yes, state-run insurers like Jasa Raharja might be tasked [to entirely handle the third-party liability insurance],” Tri Joko said Thursday.

In other words, private insurers will not be able to have their share.

 “So the ones who will reap the fruits are not the insurance industry as a whole, but just the state-owned insurance companies,” Tri Joko said.

Having a state-run insurer managing the insurance is also possible, considering that the government can bring down the price of getting one’s vehicle insured.

“Do note that this is mandatory. In our experience, whenever something is compulsory, [the government] usually appoints one or two state-owned enterprises to do the job, not the private firms,” Tri Joko said.

According to insurance expert Wahyudin Rahman, there are two options that this scheme may take. First is a “free market” model in which people are free to choose their insurance, as long as they are affiliated with the vehicle document registration center (Samsat). The second is a consortium model. This scheme sees insurers establishing a consortium and working together with Samsat.

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