Insurers told tech alone won’t solve rising complexity in Indonesia

Indonesia’s insurance penetration remains low at 2.72% despite rapid AI adoption.

Indonesia’s insurance industry is facing mounting pressure from tighter regulations such as POJK 36/2025, rising climate and health risks, and persistently low insurance penetration despite accelerating digital and AI adoption across the sector.

According to Edwin Sugianto, Director, COO, CMO, CHRO at AXA Insurance Indonesia, technology alone will not determine whether insurers in Indonesia remain competitive in the years ahead.

Speaking at the Asian Banking & Finance and Insurance Asia Summit – Indonesia 2026, Edwin said insurers are entering a period where leadership and organisational alignment matter more than simply adopting the latest technology trends.

“Artificial intelligence has become a commodity,” he said. “The question is no longer whether companies use AI, but whether they understand the right use case for their business.”

Edwin warned Indonesian insurers against implementing emerging technologies purely out of fear of missing out.

“There is no room for FOMO,” he said. “Technology should support business relevance, not become the strategy itself.”

He explained that the sector’s biggest challenge is not technological access, but the ability to align people, governance, operations, and innovation under a clear long-term vision.

“Strong leadership is becoming more critical as the industry grows more complex,” Edwin said. “Without alignment across the organisation, technology investments will not create meaningful impact.”

Indonesia’s insurance sector is also grappling with stricter compliance requirements under the PDP Law and POJK 36/2025, alongside shortages of actuarial, underwriting, and risk management talent.

To stay competitive, Edwin said insurers must prioritise leadership, customer excellence, governance, and ecosystem development ahead of technology adoption.

“Technology is an enabler,” he said. “But relevance comes from understanding customers, strengthening execution, and building the right organisational culture.”

Edwin also highlighted the importance of building a data-driven organisation through stronger governance, analytics, and real-time reporting capabilities.

“Data quality and governance are foundational,” he said. “Without that, AI and analytics will not deliver sustainable business value.”

In discussing future risks, Edwin pointed to climate change, cyber threats, and predictive health risks linked to AI and big data as emerging pressures insurers in Indonesia can no longer ignore.

“Stay competitive by staying relevant, and staying relevant can be achieved through strong leadership,” he concluded.