insurance has become a common thing that can have a positive im pact on the insured who have paid premiums. However, in the developments that have occurred, there are various problems that have arisen and become obstacles to the growth of the insurance industry and reduce public trust in insurance in Indonesia or abroad.
Claim Payment Failure:
Failure to pay claims by several insurance compa nies to customers is a serious concern. This is not only a financial problem for the company, but it also threatens public trust in the insurance industry as a whole (Majid & Sumriyah, 2023). The factors that lead to the failure to pay a claim can vary, ranging from insufficient funding issues to a lack of oversight and transparency in the claims process. 752 N. Hasanah et al.
Competitiveness in the Insurance Business:
In the midst of increasingly fierce competition, insurance companies in Indonesia must be able to compete globally. This includes improving service quality, customer trust, and over sight (Zanariyah, 2016). This challenge can be an obstacle for companies to maintain market share, especially when customers prefer insurance companies from abroad.
Customer Claim Rejection:
Claims rejection by insurance companies can stem from incomplete documentation, inconsistencies with policy agreements, or violations of the law. Although this rejection can be caused by the customers themselves, the company is also affected because it lowers customer trust in them.
Premium Effect:
High premiums can be a financial burden for customers and reduce their trust in insurance companies. This happens when the customer feels that the premium paid is not proportional to the benefits received (Siswanto, 2021).
Fraud:
The digital age brings the risk of fraud in insurance claims. The inability of companies to detect and address these scams can lead to a decline in public trust in the insurance industry as a whole.
Lack of Transparency:
Transparency in financial and operational reporting is key to maintaining customer trust. The lack of transparency can jeopardize the stability of the insurance industry as a whole and trigger a decline in public interest in insurance products.
Financial Condition:
Poor financial condition can disrupt a company’s operations and reduce investor and customer confidence. It could also affect company’s liquidity ratio, potentially leading to greater financial problems.
Late Payment:
Late payment of insurance claims not only affects customer confidence, but can also threaten the company’s continuity (Erlina et al., 2022). This is because customers and investors may interpret it as a sign that the company is experiencing financial difficulties.
Company Continuity:
From the problems mentioned above, almost a l of them can affect the continuity of insurance companies in Indonesia. The problems faced by the insurance industry, if not addressed immediately, can lead to huge losses and even threaten the survival of the company.
Legal Protection:
Ineffective legal protection can make customers feel unfair to the insurance industry, lowering their trust in the products and services offered. Not a few customers feel unfair to the law that is too protective of the insurance company than the customer itself.
Use of ICT:
Insurance companies need to make better use of information and communication technology to improve efficiency and quality of service. How- ever, there are still some companies that are lagging behind in this regard, which can affect customer perception of the quality of services offered. This is very unfortunate because information and communication technology (ICT) can play a big role in supporting the exchange of information between insurance companies and customers or institutions, information exchange can be done remotely using e-mail or chat media.