Life insurance to grow 30%
JAKARTA (JP): The local life insurance industry is expecting a 30 percent increase in new premium income this year as the country's economy continues to recover, the Indonesian Board of Insurance Companies (DAI) said on Wednesday.
Chairman of DAI's life insurance division Angger Yuwono said most life insurance companies believed the market here had started to grow again and would gain a full recovery this year.
"We believe the insurance business will shine this year because we have not seen any indications of more predicaments such as the financial crisis, which definitely affected people's financial capability in the past three years."
Based on the 1999 financial performance of the association's 48 members, which control about 90 percent of the local insurance market, the country's life insurance industry had almost returned to the precrisis era, DAI said.
Life insurance companies booked an unaudited Rp 5.42 trillion (US$614 million) of total premium income last year, up from Rp 4.85 trillion in 1998, based on data DAI compiled from the 48 life insurance firms, of which 29 are multinationals.
In terms of new premium income alone, the companies gained an increase of 23 percent last year, collecting Rp 2.9 trillion as against Rp 2.44 billion they secured in the previous year.
Angger said the 23 percent growth in the new premium income was far lower than the level of growth of 50 percent DAI predicted for life insurance business in 1999.
"We first projected the life insurance sector would grow 50 percent throughout 1999 because we saw a surge in the new premium collection during the first semester last year. Unfortunately, the situation happened the other way around in the second semester," he said.
According to DAI's data, the number of life insurance policy holders in the country increased 5 percent to 18.60 million last year from 17.19 million in 1998.
Total claims paid by the 48 life insurance firms to their policy holders dropped significantly last year, reaching Rp 3.38 trillion from Rp 7.41 trillion in 1998. (cst)