The Opportunities and Challenges of Disaster Insurance in Indonesia After Covid 19

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Ellectrananda Anugerah Ash-shidiqqi, Aidul Fitriciada Azhari ,Kelik Wardiono, Wardah Yuspin

Abstract

Indonesia is often referred to as the Ring of Fire so that there are many natural disasters, especially earthquakes, volcanic eruptions, tsunamis and landslides. Based on the Environmental Profile, geography and population can increase the risk of natural disasters in Indonesia. To overcome these losses, it is necessary to mitigate natural disaster losses. The efforts of the Indonesian government as regulated in Law No. 24 of 2007, have allocated a budget for disaster management in the APBN/APBD. The government needs to reform natural disaster risk financing policies to meet the need for large amounts of disaster funding, timely and targeted, more planned, sustainable and transparent to reduce economic losses and the burden on the state budget. This disaster risk financing must also be able to answer the financing needs when there is no disaster in the context of disaster risk mitigation and transfer, financing when a disaster occurs (emergency response) and financing after a disaster occurs (rehabilitation and reconstruction). One way of financing disaster risk that can be done is with insurance services or insurance companies. The insurance company is referred to as the individual risk insurer who follows the insurance. In insurance there is a contractual agreement between the insured and the insurer called the policy. The agreement is regarding the insurer who is willing to bear a number of risks that may arise in the future in exchange for certain payments from the insured. Payments made by the insured to the insurer are called premiums.

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