Indonesia’s non-life insurance market has stable outlook - AM Best

KUALA LUMPUR, Oct 13 -- Despite a bleak macroeconomic picture, Indonesia’s non-life insurance market is well-diversified and underpinned by solid capitalisation, supporting a stable outlook.

This is according to a new Best’s Market Segment Report, titled ‘Market Segment Outlook: Indonesia Non-Life Insurance’.

The report stated that the market’s overall robust return on equity is supported by stable historical underwriting performance and strong balance sheet fundamentals, along with good government support are factors in the stable outlook.

The Indonesia non-life insurance market expanded by 14 per cent year over year, to IDR 79.7 trillion (US$5.4 billion) in 2019, supported mainly by strong growth in credit insurance. (US$1 = RM4.15)

Gross premium written (GPW) for credit insurance, the market’s third largest business line, increased by 86.2 per cent to IDR 14.6 trillion last year.

Property insurance, the largest business segment, also posted solid GPW growth of 9.7 per cent to IDR 20.9 trillion. However, motor insurance GPW recorded muted growth of 0.3 per cent.

In a statement, the global credit rating agency believed the non-life market in Indonesia benefitted from a good business mix that would help to cushion any negative impact from the COVID-19 pandemic.

Over the near term, AM Best believes the non-life insurance market is likely to face a slowdown in premium growth and thinner margins as a result of the social restriction measures, which have been in place since last April.

More details at www.ambest.com

-- BERNAMA