The Indonesian insurance industry posted growth of 8% in terms of premiums last year, according to data from the Financial Services Authority (OJK), despite the ills afflicting the state-owned financially stricken life insurer Asuransi Jiwasraya.
Total premiums grew to IDR281.2tn ($20.6bn) in 2019, consisting of IDR179.1tn of life insurance premiums (representing a 3.6% decline from 2018) and IDR102.1tn in general insurance and reinsurance premiums (representing a 21.5% increase from 2018). Life premiums stood at IDR185.8tn in 2018, a decline of 5% from 2017. Non-life insurance and reinsurance premiums stood at IDR84tn in 2018, compared to IDR76tn in 2017.
In addition, the solvency position of the overall insurance industry is still considered healthy with the risk-based capital (RBC) ratio reaching 345.35% and 789.37% for general insurance and life insurance respectively. This value is much higher than the minimum solvency ratio of 120% set by the Authority.
Assets in this sector increased by 5.91% to IDR913.8tn at the end of 2019, compared to 12 months previously.
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Meanwhile, Jiwasraya's assets were recorded at only 1.6% of the total assets of the insurance industry or equivalent to IDR22.03tn.
"OJK assesses that the insurance industry still has great potential to grow and play a more significant role in the national economy considering that of around 260m Indonesians, currently only 12.08% are served by insurance," said OJK in a statement that also stated that the insurance industry is resilient.
Various reforms have been and will be carried out in the non-bank financial services sector, namely, regulatory and supervisory reform, institutional reform and infrastructure reform. Among other things, the RBC requirement will be revised and a policyholder protection scheme will be introduced.
Meanwhile, regarding the legal process revolving around Jiwasraya, that is being handled by the Attorney General's Office, the OJK is actively assisting the Attorney General's Office in verifying securities accounts linked to Jiwasraya that are still blocked.
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