Investment Results Grow 241.5 Percent Drive Total Increase In Life Insurance Industry Revenue

Photo: Doc. AAJI

JAKARTA - The Indonesian Life Insurance Association (AAJI) reported the performance of 56 Life Insurance Companies in the January-June 2023 period. The total income of the life insurance industry was recorded to have experienced growth. This is driven by a significant increase in investment returns compared to the same period in 2022.

Chairman of the AAJI Management Board, Budi Tampubolon, said that related to total income, until the end of June 2023, the life insurance industry managed to record a total revenue of IDR 107.32 trillion. This result was recorded to have increased by 1.8 percent when compared to the same period in 2022. This increase was driven by investment returns which increased by 241.5 percent.

"The improvement in the national economic level has a positive impact on investment returns. This of course also affects the income of the life insurance industry, which in this period increased by 1.8 percent. The hope is that with the improving economy, it will also increase people's interest in the life insurance industry and be able to encourage industrial premium income," said Budi in Jakarta, Thursday, August 24.

Budi added, while from the total premium income, the life insurance industry managed to record a total premium income of IDR 86.23 trillion. This result is still recorded to decrease by 9.9 percent when compared to the same period in 2022. In terms of products, premium income in traditional life insurance products was recorded to dominate with a total acquisition of IDR 43.67 trillion growing 12 percent.

"In the first semester of 2023, we recorded several positive points that are achievements for the life insurance industry, including growth in total income driven by a significant increase in investment returns, growth in premiums on traditional products and regular payments and consistency in the increase in total life insurance coverage. This is the capital for the industry to continue to grow and be positive in facing the various challenges ahead," said Budi.

Head of the AAJI Marketing & Communications Division, Novita Rumngangun, conveyed that the public's understanding of the importance of the benefits of life insurance was recorded to be getting better. This is shown through a consistent total coverage increase. Currently, the number of life insurance industries is 88.47 million people.

"The increase in the amount of the insured in the last few periods was recorded to be very consistent above 10 percent. As of June 2023, the total insured increase reached 19.7 percent. The largest increase occurred in the insured individuals, which reached 23.7% to a total of 27.13 million people. As for the pool's coverage growth, it reached 18 percent, so that by the end of June 2023 the total was 61.33 million people," explained Novita.

Regarding the fulfillment of obligations, Novita explained that the life insurance industry is strengthening its commitment to provide protection to the community through claim payments. Total claims reached Rp79.44 trillion have been paid during the January - June 2023 period. This number decreased by 5.3% when compared to claim payments in the January - June 2022 period.

The decline in total claims was driven by a decrease in the claim of render or value of sugar cane and also claims of partial withdrawals or partial withdrawals. Meanwhile, improving the mortality rate of society in line with the easing of the COVID-19 pandemic also has an effect on the decline in the total death claims.

"As of June 2023, the life insurance industry has fulfilled its claim payment obligations to 5.72 million people. The translation claim was recorded to have decreased 8.7 percent to Rp43.4 trillion, while for claims, the partial withdrawal fell 3.6 percent to Rp8.99 trillion. We hope that this trend can continue so that customers can feel the maximum benefits of life insurance in the future," said Novita.

Novita added that the decline in the value of the rendering claim was a reinforcement for the industry to further increase education to policyholders about the main benefits of life insurance to maintain long-term financial stability.

However, amid the decline in the majority of claims, claims for health insurance have increased which tend to be high.

"AAJI highlighted an increase in claim payments for health insurance products. As of June 2023, the increase in payment of health insurance claims reached 35.3 percent or Rp9.39 trillion. The highest increase was in payments for individual health insurance claims which reached Rp5.89 trillion, an increase of 36.1 percent," explained Novita.

Since mid-2022, health claim growth has always been above 25%, especially for Individual Health Claims. Meanwhile, components of claims such as World Death Claims tend to decline.

Novita added, this is an extraordinary thing for the industry. Therefore, in several discussions that have been held at AAJI through the COO Forum, several programs are being prepared to overcome this.

"We know that this health insurance is a basic protection that is needed by the community. Therefore, we should maintain industrial stability so that we are still able to provide better services to their customers," added Novita.