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Life insurance industry beats pre-pandemic revenue in H1
Revenue in the life insurance business returned to the pre-pandemic level in the first half of the year thanks to annual growth of 64 percent.
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evenue in the life insurance business returned to the pre-pandemic level in the first half of this year, in line with the economic recovery that was gaining steam in the same period.
Indonesian Life Insurance Association (AAJI) chairman Budi Tampubolon said on Tuesday that the industry had seen its revenue grow by 64.1 percent year-on-year (yoy) to Rp 119.74 trillion (US$8.39 billion) in the first half of this year, exceeding Rp 113.94 trillion booked in the equivalent period of 2019.
The industry’s premium revenue also grew by 17.5 percent yoy to Rp 104.72 trillion, well above the Rp 91.8 trillion booked in the first six months of 2019.
“This performance is better than the first half of 2019. We are not just comparing it to the first half of 2020, which was affected by COVID-19,” Budi told reporters in an online press conference held by the association.
In the second quarter of 2021, Indonesia saw its gross domestic product (GDP) grow 7.07 percent yoy, ending the recession that had ravaged the country since last year. The high economic growth was made possible by looser mobility restrictions, a falling COVID-19 caseload and the effects of the Idul Fitri holiday.
Read also: Life insurance industry revives in Q1
Budi expressed hope that the government would not impose any new mobility curbs, as it did in July and August, as that could hamper the industry’s projection for the rest of the year.
“If the [levels of the four-tiered] restrictions remain unchanged or are loosened, the insurance industry could grow well in 2021,” Budi said.
Unit linked insurance plans that combine insurance and investment still comprise more than 60 percent of the premium revenue. This segment grew 17 percent yoy to Rp 64.44 trillion in the first half.
Insurance sold through banks, or bancassurance, accounted for almost half of the premium income after growing by 27.3 percent yoy in the first half, followed by alternative distribution channels composed of business entities other than banks, which grew 35.8 percent yoy. Telemarketing and insurtech companies contributed smaller shares to premium revenue.
AAJI data also shows that claims and benefit payments rose by 6.1 percent yoy to Rp 74.66 trillion in the first quarter.
