Jakarta, IDN Times – The Indonesian life insurance industry recorded positive growth of 11.9 percent in 2021. The growth occurred in line with the economic recovery during the COVID-19 pandemic.
The Indonesian Life Insurance Association (AAJI) noted that the cause of the positive growth of the life insurance industry during 2021 was also due to increased public awareness regarding the importance of life insurance in preventing risks from the ongoing pandemic.
“Along with the rise of community economic activity and increasing public awareness of the importance of the benefits of life insurance in providing family financial protection, this has pushed up premium income for the life insurance industry until the end of 2021. This is a very encouraging result,” said the Chairman of the Governing Council. AAJI, Budi Tampubolon, in an official statement to the IDN Times, Friday (11/3/2022).
Based on the 2021 Performance Report, from 58 AAJI member companies, the life insurance industry managed to record revenues of Rp241.17 trillion. This figure shows a positive trend when compared to total revenue for the same period last year which experienced a slowdown by 8.6 percent or Rp. 215.44 trillion.
1. Total premium income naturally grows
Budi added that the Indonesian life insurance industry recorded a total premium income of IDR 202.93 trillion or grew by 8.2 percent during 2021.
Meanwhile, the positive revenue performance was contributed by the increase in new business premiums and advanced premiums. Each of these premiums grew 12.1 percent year on year (yoy) to Rp128.62 trillion and 2 percent to Rp74.31 trillion.
AAJI’s data also shows that Unit Link premium income will increase during 2021. The premium income is still dominated by the contribution of Unit Link products by 62.9 percent, or growing 6.4 percent compared to last year with a total of Rp. 127.70 trillion.
Meanwhile, traditional products contributed 37.1 percent to total premium income and grew 11.4 percent with a total of Rp75.23 trillion.
“The large contribution of the Unit Link product cannot be separated from the benefits provided by combining elements of product protection and investment so that Unit Link provides an opportunity for customers to obtain benefits in the form of protection as well as additional benefits for investment,” said Budi.
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2. The life insurance industry pays total claims and benefits of more than Rp150 trillion
Budi added that the life insurance industry was recorded to have protected 65.56 million Indonesians during 2021. This figure grew by 2.9 percent compared to 2020.
AAJI also recorded a total sum insured of Rp4,360.81 trillion. Meanwhile, the total claims and benefits paid by the life insurance industry totaled Rp. 159.43 trillion.
“The value of these benefits is of course used to ease the burden on Indonesian families in order to increase economic resilience during difficult times. Including in the case of COVID-19 claims, which are clear evidence of the industry’s commitment in general,” said Budi.
3. Death claims have increased
In its report, AAJI also recorded an increase in the total benefits for death claims, which amounted to 72.8 percent or Rp. 21.14 trillion. This is also the case with health claims benefits, which increased by 32 percent to Rp13.04 trillion.
Budi said the magnitude of the benefits greatly helped the economic resilience of Indonesian families when facing difficult times. This commitment is also further strengthened by the plan to cooperate with private insurance companies in supporting government programs in providing national health insurance benefits during the pandemic.
In addition, from March 2020 to December 2021, the life insurance industry has paid claims related to COVID-19 amounting to Rp8.82 trillion. Budi said that this is proof of the life insurance industry’s commitment to protecting the public.
“Until now, the life insurance industry’s commitment to improving the survival of the Indonesian people is reflected in the payment of claims and benefits that continue to be made. Even in difficult times, such as during the pandemic, the life insurance industry continues to pay claims for infected customers. financial protection for the family’s long-term plan,” said Budi.
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