General Insurance Premiums Grow 2.1%, Claims Drop 23.1% in First Half

JAKARTA, investor.id – The general insurance industry recorded an annual premium growth of 2.1% (year to year/yoy) to Rp 38.37 trillion in the first semester of 2021. Meanwhile, claims payments decreased by 23.1% (yoy) to Rp 13.10 trillion.

Data from 72 general insurance companies compiled by the Indonesian General Insurance Association (AAUI) recorded a claim ratio in the first semester of 2021 at 34.2% or lower than the previous period last year of 45.3%. Premium and claims data from AAUI is slightly different from that recorded by the Financial Services Authority (OJK), namely premiums grew 6.40% and claims 23.33%.

In this case, premium growth is still supported by the four largest lines of general insurance, namely property insurance, motor vehicle insurance, credit insurance, and health and personal accident insurance. On the other hand, a number of business lines are also the largest contributor to claim payments.

Executive Director of the Indonesian General Insurance Association (AAUI) Dody Achmad Sudiyar Dalimunthe said the growth in general insurance premiums was in line with developments in the real sector as seen from the growth of the national economy. However, general insurance still depends on the supply of premiums paid by the corporate segment, so that the performance of the corporation as a general insurance customer is very influential.

“If there is economic growth, there is the potential for an increase in general insurance premiums. The conditions in each corporation are also different, so it will affect the level of ability to pay premiums, some are still able to pay per year, some ask to be postponed, some decide on policies so that insurance does not continue,” he explained in an online press conference, Wednesday (25 /8).

Dody said that all the information and parameters that are currently available are still available agile so that his party has not been able to convey the projection of premium growth until the end of the year. Now his party is more careful, considering last year’s projection that missed the forecast of negative 30%, but the result was only negative 3.6%.

“AAUI sees that there are still many things that cannot be predicted so that we cannot answer them quantitatively. However, we are optimistic that until the end of 2021 the general insurance industry can still grow, our hope remains the same as the conditions. or position before the Covid-19 pandemic. ? backbone“They come from three main businesses, namely property insurance, motor vehicle insurance, and credit insurance,” he said.

In addition, a number of other insurance lines are expected to continue to grow positively, such as health insurance, miscellaneous insurance, and personal accident insurance.

“That is what is expected to support premium growth in 2021. For 2022 to be even more advanced, maybe business processes can change due to the implementation of technology,” said Dody.

As of semester I-2021, property insurance premiums were still able to record growth of 16.1% (yoy) to Rp 10.96 trillion in semester I-2021. In addition, claims fell 23.1% (yoy) to Rp 2.8 trillion. With a claims ratio of 25.6%, down from the same period the previous year of 38.7%.

Indonesian General Insurance Association (AAUI)
Indonesian General Insurance Association (AAUI)

Deputy for Statistics, Research & Analysis of AAUI Trinita Situmeang said that the performance of property insurance was contributed by micro insurance. “If later spread and more, of course this will be something positive, including to increase literacy,” he said.

For vehicle insurance, premiums still contracted by 5.2% (yoy) to Rp 7.40 trillion in the first semester of 2021. Meanwhile, claims were recorded at Rp 2.8 trillion, down 27.5% (yoy), with a claims ratio of 38.9% or lower than the previous period of 50.8%.

Trinita said that the increase in motor vehicle sales, which rose up to 30 percent, did not have a direct impact on the realization of general insurance premiums. In addition, many insurance companies have started to implement IFRS 17, so that the premium is divided according to the period of coverage and the premium is not recorded in full. AAUI hopes that the impact of motor vehicle sales can be seen in the coming period.

Furthermore, credit insurance slowed at the beginning of the year, but this line managed to record premium growth of 1.5% (yoy) to Rp 5.87 trillion. In line with banking credit growth of 0.59% and improvement in financing finance until June 2021. Premium lines are fully booked for credit or financing with maturities of 5, 10, 15, and 20 years.

Meanwhile, the bank’s NPL was maintained at 3.24% and the NPF improved finance contributed to credit insurance claims which fell 39.5% (yoy) to Rp 2.47 trillion. In this way, the participation claims ratio fell from 70.8% in the first semester of 2020 to 42.2% in the first semester of 2021.

“Credit insurance seems to have improved and there are talks between insurance, reinsurance, and several related parties. It is expected that the results will be positive and in the long run make risk more balanced between premium and exposure. The claims are still in stages, so the backup must be done properly, said Trinita.

Meanwhile, for health and personal accident insurance, general insurance recorded a premium of Rp 4.21 trillion or grew by 1.5% (yoy). Claims amounted to Rp 2.09 trillion, down 8.9%. Therefore, the claims ratio for the line has decreased from 55.5% to 49.8%.

“For health insurance premiums and personal accidents, people often start to realize the existence of Covid-19, both buying from conventional channels and other alternative routes,” explained Trinita.

Meanwhile, transportation insurance premiums (sea ​​cargo) was recorded at Rp 1.81 trillion or a slight decrease of 0.7%. Claims rose 4.2% (yoy) to Rp 489 billion, bringing the claims ratio up to 26.9% in semester I-2021.

Head of the AAUI Research & Analysis Department Anita Factsia said that the positive export-import conditions in the first semester of this year have not had a direct impact on transportation insurance premiums.

“Sea cargo insurance cannot be said to have decreased, but it is relatively stagnant. But indeed, when goods travel using land, sea, air (export-import) services, it grows, which should have a direct impact on marine cargo insurance, but that doesn’t seem to happen,” he said. Anita.

Furthermore, in the first semester of 2021, the hull insurance premium (sea ​​hull) grew 7.1% (yoy) to Rp 1.14 trillion. However, claims fell by 43.3% (yoy) to Rp 404 billion, resulting in a significant decline in the claims ratio to 35.4%.

Then aviation insurance (flight) recorded a claims ratio of 99.8%, up from 19.0% previously. Meanwhile, premiums fell 59.9% (yoy) to Rp 367 billion. Meanwhile claims jumped 110% (yoy) to Rp 366 billion.

Meanwhile, satellite insurance recorded a premium of Rp 22 billion, down 20.4% (yoy), without any claims. Meanwhile, engineering insurance premiums grew 9.8% (yoy) to Rp 1.46 trillion. Claims amounted to Rp 621 billion or decreased by 14.6% (yoy), with a claims ratio of 42.3%.

Premium insurance offshore energy increased 45% (yoy) to Rp 93 billion with claims of Rp 96 billion or an increase of 257% (yoy). In semester I-2021, this line recorded a claims ratio of 103.2%. While insurance land energy, respectively recorded a decrease in premiums by 33.8% (yoy) to Rp 889 billion. Claims amounted to Rp 315 billion or grew 3.1% (yoy), claims ratio of 35.4%.

Insurance (obligation) and underwriting (guarantee) each recorded a premium of Rp. 1.60 trillion, grew 3.3% and amounted to Rp. 856 billion, or grew by 26.1%. In case of insurance claim obligation decreased 44% to Rp 84 billion, while insurance claims guarantee grew 89.8% to Rp 221 billion. Meanwhile, miscellaneous insurance premiums amounted to Rp 1.65 trillion or grew 4.0%, with claims of Rp 245 billion, down 27.8% (yoy).

Editors : Mount Kunjana (gora_kunjana@investor.co.id)

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