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Country Diagnostic on Inclusive Insurance and Risk Financing

Team Leader :

Dr. Saut Sagala


Team Member :

Delaneira Humaira, Medhiansyah Putra Prawira, Wewin Wira C.W


Location :



Source of Funding :




"Disasters have posed an economic and fiscal concern for Indonesia. The high frequency of disasters have resulted in high disaster related expenditure. This high expenditure is in fact too high, as Indonesia is experiencing a disaster funding gap. Most of the disaster’s expenditure has been incurred from the post disaster phase, signifying that most assets and lives are un-insured. Furthermore, Indonesia’s natural capital and livelihoods that rely on it are at significant risk from climate hazards. The government has insurance schemes for these communities, but their sustainability and reach are questionable. Moreover, the insurance market in Indonesia is still progressing, alongside market segments of the country’s social insurance (BPJS), life insurance, general insurance and micro insurance.


Disaster Risk Financing and Insurance has been increasingly important to in the age of rising risk, DRFI also provides a framework to secure sufficient funding and utilize risk transfers. Moreover, the collaboration between the insurance industry and the development sector has grown significantly over the last five years. UNDP’s growing work in this space has led to the creation of a flagship initiative on insurance and risk finance, and the creation of a dedicated facility for supporting UNDP Country Offices and country partners worldwide. As part of the increasing operationalization of the work of the UNDP Insurance and Risk Finance Facility (IRFF), there is a need to prepare a full diagnostic review of all issues relevant to the inclusive insurance and risk finance environment in Indonesia."


Aims and Objectives:

The consultancy aims prepare a full diagnostic review of all issues relevant to the inclusive insurance and risk finance environment in Indonesia. This diagnostic will examine supply and demand issues, everything from the legislative and regulatory environment through to community needs, the potential for how insurance and the INFF process can be linked, for inclusive insurance and risk finance, through to insurance investments and natural capital.



The diagnostic followed the IRRF diagnostic methodology for inclusive insurance and risk financing. Which examined (1) underlying risk and development metrics, (2) market conditions for inclusive insurance, (3) market conditions for risk finance, (4) insurance/risk finance and development integration, and (5) additional information on insurance investment and natural capital protection. The study was done in Indonesia.


Expected Result:

A comprehensive diagnostic outlining key issues and opportunities in further developing disaster risk finance and inclusive insurance in Indonesia. This report will also include full quantitative and qualitative analysis and a baseline of recommendations for future UNDP engagement with different stakeholders on inclusive and risk financing

Last updated 13 Oct 2022 18:32 pm

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