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Life insurance investment returns plunge on IDX slump
Stocks are the second-largest component of life insurers' investment portfolios, after government bonds.
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The office of the Indonesian Life Insurance Association (AAJI) in Jakarta is shown in this undated photo. (Courtesy of AAJI)
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nvestment returns for local life insurance companies have plummeted as a result of a recent sharp downturn in the Indonesian Stock Exchange (IDX) Composite index.
Life insurers recorded returns of Rp 1.6 trillion (US$96.6 million) in January, down 56 percent year-on-year (yoy), dragging their overall revenue down by 16.5 percent to Rp 13.97 trillion.
For the whole of last year, investment returns of life insurers dropped 29 percent to Rp 22.2 trillion as the IDX Composite index slid 2.65 percent.
The main gauge of the Jakarta bourse has lost almost 13 percent of its value since the start of the year. On Monday, it briefly dropped below 6,000 points, marking the lowest level this year, before recovering part of the day’s losses.
On March 18, market turbulence triggered a 30-minute trading halt for the first since the coronavirus pandemic, after the index had lost over 5 percent.
Stocks are the second-largest asset class within life insurers' investment portfolios, after government bonds.
The companies have reduced the share of equities from 27 percent of their total investments in January 2024 to 24 percent this year, according to data from the Financial Services Authority (OJK).
