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Life insurers eye ‘double-digit growth’ in 2021 amid recovery
Life insurers saw coverage shrink 7 percent yoy to 63.69 million people in 2020 mainly as companies cut back on employee benefits.
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New insurance products have been launched to help people adapt to new COVID-19 habits. (Shutterstock/thodonal88)
I
ndonesia’s life insurance industry expects revenue to rebound this year, after facing a drop last year, as economic recovery enables more companies to pay premiums in 2021.
The Indonesian Life Insurance Association (AAJI) expects to book double-digit growth in revenue in 2021, after it contracted 8.6 percent year-on-year (yoy) to Rp 215.42 trillion (US$15.04 billion) last year.
“On several occasions, the AAJI has stated that 2021 revenue will most likely rebound to the 2019 level, or even higher,” said AAJI actuarial and risk management head Fauzi Arfan in a virtual press conference on Tuesday.
He said the association had been recording improvements in revenue and premium income since the fourth quarter of last year, partly due to the impact of the government’s national economic recovery program that has been extended until this year.
The government has pledged Rp 699.43 trillion for the recovery program that includes distributing vaccines, granting tax breaks and providing direct cash transfers. The Financial Services Authority (OJK) has also relaxed several regulatory requirements for insurers to help them stay afloat.
Read also: Government pledges higher spending boost to focus on health
Many businesses laid off employees and cut back on employee benefit spending last year to cut costs as the COVID-19 pandemic caused Indonesia’s economy to contract by 2.07 percent, marking its first annual contraction since the 1998 Asian Financial Crisis.
