The Indonesian Association of Life Insurance (AAJI) has reported that the total income of the life insurance industry rose 64.1 percent year on year to Rp119.74 trillion in the first half of 2021.
The income of the industry was pegged at Rp73 trillion in the year-ago period, it said.
“The life insurance industry in the first semester of 2021 managed to get through the difficult times of the COVID-19 pandemic, even growing five percent above the achievement of the first semester of 2019 when COVID-19 did not exist, namely from Rp113.94 trillion,” Chairman of the AAJI management board, Budi Tampubolon said.
Speaking at an online press conference originating from Jakarta on Tuesday, he said the growth in the life insurance industry was in line with the recovery of the national economy, which grew 7.07 percent in the second quarter of 2021.
Meanwhile, the total premium income in the first half of 2021 also showed good growth, he informed. The total premium income swelled 17.5 percent in the first half to Rp104.72 trillion from Rp89.09 trillion a year ago, he added.
“We believe that to some extent this achievement cannot be separated from the pandemic that has raised public awareness about the need for life insurance protection,” Tampubolon said.
The positive performance also resulted from the growth of new business premiums, which increased 27.4 percent to Rp68.02 trillion in the first half of 2021 from Rp53.41 trillion in the first half of 2020, he disclosed. Meanwhile, advanced premiums grew 2.8 percent year on year in the first half to Rp36.7 trillion from Rp35.68 trillion, he said.
Based on the type of product, unit link insurance was still the preferred choice for the community, with premium contribution reaching 62 percent during the first half of 2021, while the figure stood at 38 percent for traditional life insurance, he said.
Meanwhile, according to distribution channels, bancassurance was still the largest contributor to the life insurance premium income at 46 percent, followed by agents at 29 percent, and alternatives at 25 percent in the first half of this year.
Along with the positive performance of life insurance, total life insurance assets also grew 12.9 percent year on year to Rp575.46 trillion, while technical reserves grew 12.4 percent on year to Rp443.95 trillion, Tampubolon said.
At the beginning of the pandemic, the life insurance industry’s assets were down 12 percent, and technical reserves had contracted 11.7 percent, he noted.
“This (current growth) is not only due to industrial growth, but also shows prudence and a prudent attitude to reserve more funds in order to be able to face challenges in difficult times, as well as being able to fulfill commitments and promises to policyholders,” said Tampubolon.
Source: Antara News