An insurance policy is a legal document that serves as the foundation of financial protection for customers. It outlines the rights and obligations of both the insurance company and the policyholder.
But despite its importance, the validation process for policies still often relies on handwritten signatures—an approach that brings several security and efficiency limitations.
This is where a more advanced and secure solution comes in: the electronic signature (TTE). Using electronic signatures for insurance policies strengthens security, accelerates service delivery, and ensures legal compliance.
So, why do insurance policies need electronic signatures? Here’s the explanation.
Definition of an Insurance Policy and What It Contains
An insurance policy is a legal document that forms the agreement between the insurance company and the policyholder. It details the rights and responsibilities of both parties, along with specific terms that govern the protection provided for the insured risks.
The primary function of an insurance policy is to serve as a binding contract and a legal reference in the event of a claim or dispute.
A policy typically includes:
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Insured Information: Name, address, and personal details of the policyholder or insured object
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Policy Number: A unique identifier
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Type of Coverage: Life, health, vehicle, property, etc.
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Coverage Benefits: The compensation amount paid when a risk occurs
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Premium: Fees paid by the customer according to the predetermined period
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Policy Period: The timeframe the protection is valid
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Claim Conditions and Exclusions: Procedures, requirements, and risks not covered
The authenticity of an insurance policy must be preserved because it functions as a binding legal document and serves as the foundation for all insurance-related transactions and protections.
Risks of Using Wet Signatures in Insurance Policies
As we know, the insurance industry handles sensitive customer data—transaction histories, personal information, and more.
With technological advancements, the risk of data exposure and document misuse has grown significantly. Even when documents are physically signed, fraud and forgery are still possible.
Some risks of relying on wet signatures for validating insurance policies include:
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Document Forgery: Handwritten signatures are easy to imitate or trace, allowing unauthorized parties to misuse them for fraudulent claims.
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Manual Verification Errors: Insurance staff must verify handwritten signatures manually, which is time-consuming and prone to human error.
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Unauthorized Document Access: Physical documents can be duplicated, lost, or misused during handling, shipping, or storage.
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Limited Mobility: Customers must be physically present to sign documents—a major obstacle in urgent situations such as hospitalization or accidents.
These risks slow down operations and reduce customer trust in the insurer.
Transitioning to Electronic Signatures
An electronic signature (TTE) is a legally recognized digital signature used on electronic documents in Indonesia, in accordance with the Electronic Information and Transactions Law (UU ITE) and Government Regulation No. 71 of 2019.
However, not all electronic signatures carry the same legal weight. The highest level of legal validity applies to certified electronic signatures—those equipped with a digital certificate issued by an official Electronic Certification Provider (PSrE) recognized by the government.
To obtain a digital certificate, users must complete identity verification, typically by uploading their ID and capturing biometric data. This ensures the signature truly belongs to the right person.
Here’s why electronic signatures are highly beneficial for insurance policies:
1. More Practical and Efficient
For example, imagine signing a policy manually, then scanning and uploading it back into the insurer’s system. Not efficient at all, right?
With electronic signatures, everything happens in one integrated digital process. Each signed document contains a digital certificate, making the process more secure and fully transparent.
2. Guaranteed Document Integrity
Once signed digitally, every action taken on the document leaves a digital trail. This ensures the integrity of the document is maintained at all times.
3. Improved Customer Trust
Fast, legally valid, and secure processes significantly enhance user experience and strengthen the company’s reputation as a modern, reliable insurer.
VIDA’s Role as a PSrE
One of Indonesia’s official PSrEs is VIDA. VIDA provides certified electronic signatures and digital identity verification services that comply with both Indonesian and global regulations, including eIDAS and WebTrust.
For insurance companies, VIDA’s digital signature solutions can be integrated in several ways:
1. VIDA Sign Platform Open API
The VIDA Sign Platform Open API allows insurers to integrate digital signature capabilities directly into their backend systems, such as customer portals or claims platforms.
Example: The insurer sends a digital policy to the customer, who then signs it using VIDA.
2. DirectSign
DirectSign enables users to sign documents directly within an insurance application or website—without being redirected to an external page. Common use cases include agreements or terms & conditions.
In today’s fast-paced digital landscape, relying on wet signatures for insurance policy management is no longer practical. Electronic signatures offer a solution that is more secure, efficient, and legally compliant.
By adopting electronic signatures from VIDA, insurance companies can strengthen security, streamline processes, and build greater customer trust.
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