Despite a bleak performance in the first quarter of this year, life insurers are confident they will attain 20 percent revenue growth supported by people'€™s growing awareness of life insurance products.

Indonesian Life Insurance Association (AAJI) chairman Hendrisman Rahim said on Wednesday insurers'€™ total revenue in the first quarter of this year decreased by 7 percent to Rp 39 trillion (US$3 billion) from Rp 41 trillion in the same period last year.

'€œTotal premiums revenue decreased by 1.5 percent to Rp 25.65 trillion in the first quarter of this year first [...] investment return also decreased by 18 percent to Rp 11.93 trillion in the first quarter of this year,'€ he told a press conference.

According to the association, total revenue from new customer premiums in the first quarter of this year decreased by 15.5 percent to Rp 14.5 trillion from Rp 17 trillion in the same period last year.

However, the total premiums revenue from existing customers increased by 25 percent to Rp 11 trillion in the first quarter of this year from Rp 9 trillion in the same period last year.

Hendrisman said the slumping performance was mainly caused by Indonesia'€™s unstable economic condition. In addition, most investors are awaiting the results of the July 9 presidential election before making moves.

'€œAfter the election, we believe that [the industry] will improve again [...] we are targeting 20 percent growth each year and we remain optimistic that this year [premiums] revenue growth will reach 20 percent,'€ he added.

The optimism is mainly driven by the increase in the number of individual policyholders and revenue from existing premiums as well as the decrease in the number of surrendered claims, he said, referring to policyholders that cancel their policy.

That shows awareness about life insurance is increasing, he added.

The number of individual policyholders in the first quarter of this year increased by 16.6 percent to 10.41 million people from 8.94 million people in the same period last year. Surrendered claims decreased by 39 percent in the first quarter of this year to Rp 6.1 trillion from Rp 10 trillion in the same period last year.

Aside from that, he added that if a micro-insurance pilot project for the poor, prepared by the Financial Services Authority (OJK), could be launched this year, it would also accelerate the targeted achievement.

The OJK is currently working with the Association of General Insurance Companies (AAUI) and the AAJI to design four basic micro-insurance products.

'€œThe products are expected to be launched in the third quarter of this year,'€ Hendrisman said, adding that initially the products were targeted for release in the second semester.

Meanwhile, AAJI communications head Nini Sumohandoyo said the slow growth of policyholders was mainly caused by the low number of licensed insurance agents.

'€œIn Indonesia, one agent is handling 700 people, while in Malaysia, each agent is handling 305 people. Meanwhile, in Hong Kong, each agent is handling 202 people,'€ she said.

In response, the association is aiming to increase its number of licensed insurance agents to 500,000 by the end of 2015, she said. One way to do that, she added, was to provide easier access for those who want to take the license exam. (ask)

Popular

Govt eyes September for mass relocation of civil servants to Nusantara

Govt claims 'mudik' 2024 traffic management a success

Public hopes swell ahead of election dispute ruling