The combined premium revenues recorded by AAUI’s members in the first quarter grew by nearly 19 percent quarter-to-quarter to Rp 19.76 trillion (US$1.37 billion).

AAUI executive director Dody Achmad Sudiyar Dalimunthe said fears that the election would trigger political unrest contributed to an increase in purchases for vehicles and house insurance, which constituted over half of the total premium revenues.

Dody predicted last year in an interview with Kontan that demand for risk-related insurance would increase as cash flow and consumption was expected to be high during the election period.

“[Some customers have bought] extensions on insurance for terrorism or sabotage. These people are afraid of the possible risks [during the elections] like riots,” Dody said in a press conference on Thursday.

Supporters of presidential candidate Prabowo Subianto staged protests in front the Elections Supervisory Agency (Bawaslu) headquarters in Central Jakarta in Jakarta on May 21 following the announcement of the result of the presidential election. Joko “Jokowi” Widodo and his running mate Ma’ruf Amin won the April 17 election by a 55.5 percent to 44.5 percent margin over Prabowo and Sandiaga Uno.

AAUI’s research, statistics, information technology analysis and actuarial head, Trinita Situmean, said cars set on fire in such circumstances could be replaced through insurance schemes, as long as the risk-related terms were included in the agreement.

For example, customers subscribed to riot insurance extensions are likely to be covered by their insurers, which would require them to pay an additional 0.5 percent on top of their monthly premium.

“However, the insurance company has to investigate first, as the [fire’s] point of origin may differ,” Trinity explained.

“For instance, if the car’s radiator sparked the fire, then only the radiator will be compensated, as insurers will not be able to replace the entire car.”

AAUI executive director Dody said the acceleraion of the infrstructure development program at the final year of Jokowi’s first term also contribued to the sharp increase in the premium income in the first quarter of this year.

In the 2018 state budget, the government allocated Rp 410.7 trillion for infrastructure development, the largest allocation for infrastructure in the country’s history. Finance Minister Sri Mulyani Indrawati also told Kontan in a recent interview that in the first quarter the government’s spending had grown 11.8 percent to Rp 370 trillion.

As such, the association has expressed optimism it would reach the 10 percent gross premium revenue growth target it set last year. The association’s current market penetration of 3.04 percent was also expected to increase, Dody said, as government-subsidized insurance for farmers and fishermen, among others, had boosted public awareness of the importance of insurance.

However, he warned insurers of looming global risks, as evident in skyrocketing claims in energy as oil prices remained "expensive”. The first quarter, he said, had seen a 37.9 percent increase in claims in the first quarter to Rp 28.7 trillion.

In addition, the ongoing trade war between China and the United States presented a gloomy outlook for export-related insurers, he added, amid economic turmoil.

“Almost every business line enjoyed positive growth in the first quarter [...] but it’s too soon to predict future performance only from [data] in the first quarter,” Dody said.

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