OJK Calls Unit Link Still The Leading Product Of Life Insurance In 2025

Insurance (Photo: dock. unpslash)

JAKARTA - The Financial Services Authority (OJK) predicts that unit link products will still be one of the leading products for the life insurance industry by 2025. Although, the portion of the unit link has been at a new equilibrium of around 26-28 percent.

OJK Chief Executive of Insurance, Guarantee and Pension Funds (KE PPDP) Ogi Prastomiyono said, until the end of 2024, the premium of the link unit reached IDR 51.8 trillion or 28 percent of the total life insurance premium.

"Year on year (yoy), this premium figure still shows a negative growth rate. However, if you look at the performance of the unit link in 2024, this figure shows an increasing trend throughout 2024," said Ogi quoting Antara.

Meanwhile, said Ogi, the portion of endowment which is a purely insurance product has increased since the reconstruction of the link unit, and is currently in the portion of 31 percent of the total premium.

These two products, both link units and endorsements, are considered to be the backbone of the premium source for the life insurance industry in the future.

Until now, Ogi noted that there are two general insurances that market unit link products. The unit link premium is 0.01 percent of the total general insurance premium.

Based on OJK records, commercial insurance recorded total assets reaching IDR 925.91 trillion, an increase of 2.53 percent yoy. The performance of commercial insurance in the form of premium income in the January 2025 period was IDR 34.76 trillion, down 4.10 percent yoy, one of which consisted of life insurance premiums growing by 10.39 percent yoy with a value of IDR 19.14 trillion.

In general, the capital of the commercial insurance industry still shows solid conditions. The life insurance industry itself aggregated a risk based capital (RBC) of 448.18 percent or above the threshold of 120 percent.