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Life insurance industry revives in Q1
Life insurers in Indonesia booked net income in the first quarter of 2021, reversing the net loss booked in the same period last year, as business activities and capital markets recovered.
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ife insurers booked net income in the first quarter of this year, reversing the net loss booked in the same period last year, as business activity and capital markets recovered.
The Indonesian Life Insurance Association (AAJI) reported on Tuesday that the industry had recorded Rp 62.7 trillion (US$4.3 billion) in net profit for the first quarter. This contrasts with the Rp 460 billion net loss in the same period the year before, which coincided with the COVID-19 pandemic’s initial spread throughout the country.
Read also: Life insurers eye ‘double-digit growth’ in 2021 amid recovery
“Rising public and business activity are reflected in the rising income for life insurers. The big increase in premiums from new businesses and the positive results from investments in the first quarter of this year generated a sharp increase in net income,” said AAJI chairman Budi Tampubolon in a statement on Tuesday.
AAJI data shows that premium revenue increased 28.5 percent yoy to Rp 57.4 trillion in the first quarter, led by a rise in new business premiums and a rebound in investment income.
New business premiums grew 42.3 percent yoy to Rp 37.04 trillion as recovering businesses reinvested in insurance. Investment income rebounded to Rp 2.4 trillion, up from a net loss in the same period last year, as the domestic capital market recovered.
“A slight uptick in existing premium payments is another proof of Indonesian awareness of insurance,” added AAJI research and development head Edy Tuhirman.
AAJI data also shows that claims and benefits payments rose 23.5 percent yoy to Rp 47.6 trillion in the first quarter with the sharpest increase recorded in death claims, up 62 percent to Rp 4.45 trillion.
The first-quarter rebound in life insurance came as financial services contracted 2.99 percent yoy, a reversal of the 10.67 percent growth in the same period last year, according to Statistics Indonesia (BPS) data.
Read also: Insurance premium income to contract this year: Association
The report was based on data from 58 insurance company members of the association.
