Senior Economists Of Indef Call The Increase In Interest Parts Not Influence Insurance Business

Senior Economist Aviliani. (Photo: Doc. Antara)

JAKARTA - Senior Economist of the Institute for Development of Economics and Finance (Indef) Aviliani said that the increase in benchmark interest rates will not affect the insurance business. The reason is, it has no direct relationship.

"The increase in interest rates will not affect insurance, because insurance shares risks, so this is a necessity and has nothing to do directly to interest rates," said Aviliani in Jakarta, Friday, October 14.

Aviliani added that interest rate increases are usually directly related to credit and investment financing.

He argues that in the future the insurance industry will continue to develop and require better supervision from the Financial Services Authority (OJK).

"The perpetrators also need to provide governance and openness to the public so that the public can judge which insurance is the best for themselves," said Aviliani.

He added that currently the development of insurance is starting to develop in a better direction.

This is due to the increasing number of people who are educated and the high number of millennials who belong to the middle class.

"In my opinion, development insurance has indeed started to grow tremendously and they already have very good literacy about finance, so insurance has grown better in 2021 until now," continued Aviliani.

Meanwhile, based on the records of the Indonesian General Insurance Association (AUI), insurance industry assets grew 13.2 percent in the second quarter of 2022 or reached IDR 1,675.8 trillion.

For life insurance, it grew 7.9 percent (Rp559.5 trillion) with a portion of 36 percent, while in general insurance the portion was 12 percent and 7.2 percent grew (Rp196.6 trillion).

As for the reinsurance, he continued, it has a portion of 2 percent with asset growth of 13.8 percent or reaching IDR 33.7 trillion.

Growth was also recorded by the premium of the insurance industry which reached IDR 266 trillion or grew slightly by 2.8 percent.

Then on a claim basis, the insurance industry in the second quarter also recorded an increase of 13.8 percent with claims reaching Rp186.4 trillion.