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View all search resultsLife insurers say premium income will contract this year
AAJI chairman Budi Tampubolon said on Sept. 25 that the association expected the industry's premium income to contract 2.5 percent year-on-year this year.
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T
he life insurance industry will see a contraction in premium income this year on the back of the COVID-19 crisis, despite people’s rising awareness on health, the Indonesian Life Insurance Association (AAJI) has stated.
AAJI chairman Budi Tampubolon said on Sept. 25 that the association expected the industry's premium income to contract 2.5 percent year-on-year (yoy).
The life insurance industry’s premium income has contracted 2.5 percent yoy to Rp 88.02 trillion (US$5.9 billion) in the first half of the year from the same period last year. The decline in new premium income and renewed premiums contributed to the lower figure.
“Everyone is now focused on surviving. The second quarter was better than the first quarter but if the third and fourth quarter are similar to the second quarter, we will still see contraction this year, but just not too deep,” he said during a virtual press conference.
In comparison, the industry booked Rp 196.69 trillion in premium income last year, up 5.8 percent compared to 2018, according to AAJI data.
Insurance penetration in Indonesia has been low for a long time. According to the latest data from the Organization for Economic Cooperation and Development (OECD), Indonesia’s insurance spending in 2018 was only 1.79 percent of the country’s GDP, lower than in neighboring Malaysia, where it was 4.4 percent.
Read also: Need for insurance rises as pandemic poses risks
