Life Insurance Business Increases 64 Percent, AAJI Calls Recovery Signal Stronger

JAKARTA - The Indonesian Life Insurance Association (AAJI) announced a stable and positive growth in the performance of the life insurance industry in the first semester of 2021. This was indicated by the total revenue from various business lines which grew by 64 percent year-on-year (yoy). ) in the first half of the year.

Chairman of the AAJI Management Board Budi Tampubolon said that a strong signal of economic recovery is reflected in the life insurance income side where the industry achieved premium growth of 17.5 percent yoy.

"The improvement in income from premiums, investments, reinsurance premiums and others in the first half of this year on a year-on-year basis has built our optimism about the economic recovery in the future," he said in a press statement on Tuesday, September 14.

According to Budi, premium income was largely supported by an increase in new business premiums of 27.4 percent with a total value of Rp. 68.02 trillion and advanced premiums of 2.8 percent or Rp. 36.7 trillion.

The large growth in new business premiums was strongly supported by the strengthening role of Bancassurance sales. This distribution channel grew 37.5 percent or equivalent to a premium value of IDR 37.96 trillion this year. Because of its dominance, the portion of Bancassurance's contribution took 55.8 percent of the total new business premium.

In other types of income, returns from investment activities also recorded very significant positive growth. If in the first semester of last year life insurance recorded a loss of Rp. 21.64 trillion, then the opposite occurred in the first semester of this year.

Furthermore, AAJI member companies recorded positive investment income, amounting to IDR 4.9 trillion in the first semester of 2021. This figure is equivalent to an increase of 122.6 percent of returns in the same period 2020.

Meanwhile, the claims and benefits provided by the industry to the community were also able to continue to grow by 6.1 percent yoy, to Rp74.66 trillion.

“AAJI assesses that the consistency of claim payments and benefits from its members in the last three years is proof of the commitment of the life insurance industry. In addition, the public is also increasingly aware of the importance of the benefits of protection. The average annual claim paid by the life insurance industry to the public reaches Rp. 148.52 trillion,” concluded Budi.