Total life insurance premium in Indonesia reached of Rp143.7 trillion (US$10.26 billion) in the third quarter (3Q) of 2019, the association told the media on Wednesday (12/11) - Photo: Special

JAKARTA (TheInsiderStories) – Total life insurance premium in Indonesia reached of Rp143.7 trillion (US$10.26 billion) in the third quarter (3Q) of 2019, the association told the media on Wednesday (12/11). The amount rose 2 percent from same period in 2018 of Rp140.9 trillion.

Chairman of Indonesia Life Insurance Association, Budi Tampubolon explained, the growth was supported by new customer, which increased 0.5 percent to Rp89.9 trillion and by renewal premium with total amount of Rp53.7 trillion or climbed 4.7 percent from previous year.

“In term of marketing channel, bancassurance contributed by 41.8 percent and agent by 39.9 percent,” he said by adding the premium impacted to total revenue of the companies, which increased 14.7 percent from Rp149.8 trillion to Rp171.8 trillion.

Unlike premium, the investment return, he said, grew significantly by 1,456 percent to Rp19.9 trillion. Tampubolon asserted the increased was caused by public who more literate to insurance as investment instrument.

While for claim, it has been paid of Rp104.3 trillion or increased 17.4 percent from Rp88.8 trillion in last year. Total asset of the industry also edged up by 6.8 percent to Rp548.7 trillion, he adds.

Despite low growth in 3Q of 2019, the association estimated life insurance premium will grow by 10 to 14 percent in 2020. It will be supported by new and renewal premium which will grow 12.9 percent and 9.7 percent, respectively.

Head of Department Life Insurance Association Yanes Matulatuwa added, the huge of Indonesia population of 268 million people will support the life insurance growth in the country. It is also strengthened by additional of distribution network and more educated public.

While, for the potential investment, the association predicted will be slowing down and only grow by 7 percent in 2020. Its in line with asset growth by 8 percent.

Matulatuwa revealed, the industry will still put on the funds to mutual funds, stocks and government bonds. The mutual funds and stocks have been preferred instrument by the contribution of 34.59 percent and 31.14 percent in 3Q of 2019.

Recently, Allianz Research forecast, the Asia‘ insurance market, except Japan, will rebound in 2019, propelling premium growth to almost 11 percent. But, long-term prospects look a little brighter.

The researcher expect the insurance markets to continue to recover, with global premium growth forecast to reach around 5 percent in the next decade. Given the accelerating demographic change, particularly in emerging markets with underdeveloped social security systems, life insurance should again grow a tad faster than the property & casualty business (5.5 percent vs 4.4 percent).

Growth expectations for Asia are notably higher – the region should achieve growth of 9.4 percent p.a. over the next decade (life insurance 9.8 percent). All in all, around 60 percent of additional premiums will be generated in Asia.

Globally, the insurance premium volume rise to 3,655 billion euros (excluding health insurance) in 2018. Compare to previous year, the nominal increase adjusted for exchange rate effects is 3.3 percent.

In Asia, premiums rose by a meager 2.3 percent, only the second time since the turn of the millennium that it trailed behind global growth. Moreover, with an increase of 4.0 percent, even Japan grew faster.

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