The insurance industry is forecast to continue to grow till the end of this year after showing a positive performance in the first six month, in terms of premium growth, penetration and density.
For example, in 1H2021, life insurance premiums grew by 18.35% year-on-year while general insurance premiums increased by 2.5%, according to a report on the news site Beritasatu.com.
Indonesian Insurance Council (DAI) chairman Tatang Nurhidayat believes this positive trend will continue until the end of the year, although it is difficult to predict the absolute figures because of the economic uncertainty caused by the COVID-19 pandemic.
“If we look at the fundamentals, and at the first and second quarters, we are optimistic that this year can be passed better than last year," said Mr Tatang.
He said that for the insurance industry to continue to grow, insurance players must also be able to change in order to respond to new conditions. Changes are needed in areas such as product innovation and marketing, etc.
He added, “However, because we are in a risky business, I think prudence remains a guideline. So it doesn't just change, but caution and good governance must be improved."
Innovation is key
Echoing the need for change, BRI Insurance CEO Fankar Umran said, "We see that this pandemic has a wide impact everywhere, both on health and the economy. If the economy is affected, cash flow will be affected. Then we must also look at changes in people's behaviour in transactions and also people's expectations."
Various strategies and innovations are also being carried out by BRI Insurance in order to continue to grow. For example, in responding to the declining cashflow in the community, it has been necessary to design affordable products. An example is to allow customers to pay premiums monthly instead of annually.
Insurers have to innovate by adopting digital platforms so that they can reach more people amid movement restrictions, said Mr Fankar.