2025 Premiums Fall 1.8%, Are Life Insurers Starting to Rely on Investment Returns?

The Indonesian Life Insurance Association (AAJI) recorded a slight 1.8% year-on-year (YoY) decline in total industry premium income to Rp181.27 trillion.

AAJI Chairman Albertus Wiroyo explained that this situation more accurately reflects changes in public preferences for premium payment patterns.

He noted that new business premiums paid regularly actually increased by around 7.8%. For AAJI, this indicates that public interest in life insurance protection remains steady.

“This is also supported by the industry-wide total number of policyholders rising 8.6% year-on-year to 168.03 million people,” he stated during a press conference on Friday (13/3/2026).

On the other hand, Albertus also conveyed that the life insurance industry’s investment returns experienced a significant 103.1% YoY increase throughout 2025. He said this result drove total industry revenue to Rp238.71 trillion.

“So, as of December last year, the industry’s investment returns rose 103.1% compared to 2024, reaching Rp47.32 trillion,” he revealed.

At the same occasion, AAJI’s Marketing and Communications Division Chairman Harsya Wardhana Prasetyo stated that the life insurance industry allocates 88.5% of its assets to investments.

He disclosed that throughout 2025, the total investment assets of the life insurance industry were recorded at Rp590.54 trillion, up 9% YoY. Upon closer examination, the investment instrument that saw significant growth was Government Securities (SBN), which increased 20.9% to Rp248.25 trillion.

“This reflects the life insurance industry’s commitment to supporting national development financing, while placing funds in safe and stable long-term investment instruments to safeguard policyholders’ interests,” said Harsya.

In response, PT Asuransi Ciputra Indonesia or Ciputra Life views the rise in investment returns as providing a positive contribution to company profits amid slowing premiums.

“However, as a life insurance company, premium growth remains the company’s primary target,” said Ciputra Life President Director Hengky Djojosantoso to Bisnis, quoted on Monday (23/3/2026).

Therefore, he continued, the company will continue to focus on healthy and quality premium growth. The approach involves strengthening distribution channels, product development, governance, and comprehensive risk management implementation.

Nevertheless, Hengky did not overlook that good investment management plays an important role in maintaining portfolio value sustainability and supporting the company’s obligations to policyholders.

“Thus, both can contribute sustainably to the company’s performance,” he stated.

For context, throughout 2025, Ciputra Life recorded investment returns of Rp66.24 billion, growing 69% YoY. The largest portion of investments was in government bonds and corporate bonds.

Meanwhile, insurance observer Irvan Rahardjo assessed that the significant rise in investment returns while premium income fell is a fairly common dynamic in the life insurance industry, especially during challenging economic conditions.

However, he added, to determine whether companies will push investment returns more than premium income, it needs to be viewed from the basic function of the insurance business itself.

“Life insurance companies will not abandon their focus on premiums, because premiums are the main source of liquidity and the core business that ensures long-term operational sustainability,” he said.

Furthermore, Insurance Observer and Lecturer in the MM Programme at the Faculty of Economics and Business UGM, Kapler Marpaung, emphasised that life insurance income should lie in underwriting results or profits, not due to increases in investment returns.

“Not to mention if we delve deeper into the ratio of own capital to premium reserves and claims against the amount of investment. Not all life insurance investment capital is pure equity either,” he remarked.