INSURANCE | Staff Reporter, Indonesia

GWP of Indonesian general insurers to hit $5.17b in 2025

The sector is expected to recover 2.9% in 2021.

The gross written premiums (GWP) of Indonesia’s general insurers will likely reach $5.17b (IDR77.53t) in 2025, a GlobalData report projected, with the market expected to recover 2.9% in 2021.

Restricted commercial activities and lower domestic consumption led to a steep decline in demand for general insurance, with the most impacted being property lines, which declined 6.2% in 2020.

However, it is poised to benefit from investments in infrastructure, proposed as part of the government's economic reforms.

Credit insurance accounted for 21% of the total general insurance premiums in 2019, posting a CAGR of 72.1% between 2017 and 2019 due to increased awareness and implementation of the 2016 National Financial Inclusion Strategy, which expanded funding for small and medium-sized enterprises (SMEs) and micro SMEs. However, the economic volatility and heightened risk of bad debts could weigh on the sector in 2021.

Personal accident and health insurance (PA&H), which accounts for 8% of general insurance premiums, is forecasted to grow in 2021, backed by increase in awareness for health insurance products. As policies providing COVID-19 hospitalisation and telemedicine benefits gained traction, the category is expected to grow at a CAGR of 7.03% during 2021-2025 and partially mitigate decline from other business lines.

With many sectors opening up, incremental gains were reported across sectors in Q4 2020, indicating a rebound in the insurance industry as well.

“The proposed regulations permitting general insurance companies to issue PAYDI and unit-linked long-term general insurance products could usher in product innovations and help increase insurance penetration over the forecast period,” said analyst Rakesh Raj.

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

To get a media kit and information on advertising or sponsoring click here.