Liga Asuransi – The development of the insurance industry is always interesting to follow, and this time, we have summarized 7 news related to insurance that you should know.
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Increase in Credit Insurance Premiums Marks a Significant Surge in Claims
During the first semester of 2023, there was a significant increase in credit insurance premiums and claims. The Indonesian General Insurance Association (AAUI) noted that credit insurance premiums increased by 31.4% to IDR 8.4 trillion during the first half of 2023. On the other hand, credit insurance claims also increased by 31.3% to IDR 4.7 trillion.
According to AAUI Executive Director Bern Dwyanto, the increase in credit insurance premiums is in line with the rise in lending to the public. Bank Indonesia (BI) recorded bank credit growth of 7.8% until June 2023, which occurred in various types of credit, including investment credit and consumption credit.
“Consumption credit grew 9.1% YoY, mainly driven by Home Ownership Loans (KPR), Motor Vehicle Loans (KBB), and multipurpose loans,” Bern said in an interview with Kontan.
In addition, Indonesia’s economic stability is also an essential factor contributing to an increase in credit insurance premiums. Bern added that the rise in credit insurance claims occurred due to the impact of the poor risk assessment of the banking sector in the past. “So the increase in claims will continue,” said Bern.
Source: https://keuangan.kontan.co.id/news/premi-asuransi-kredit-naik-klaim-juga-meningkat
Super Profitable: General Insurance Dominates Investment in SBN with the Largest Portion
According to data from the General Insurance Association of Indonesia (AAUI), in the first semester of 2023, the type of investment in Government Securities (SBN) has dominated most of the total investment in the general insurance sector, reaching 32.3% or the equivalent of IDR 31.31 trillion. This shows a significant increase from semester I-2022, where the SBN share was only 29.8%, with an investment value of around IDR 27.64 trillion.
In the second place, there are types of investment deposits, including time deposits and certificates of deposit, which have a portion of 24.3% or IDR 23.55 trillion in semester I-2023. This portion has decreased slightly from the same semester in 2022 when the portion of deposits reached 24.8% with an investment value of IDR 23.06 trillion.
Trinita Situmeang, Deputy Chairperson of AAUI for Statistics and Research, noted that the combined investment in SBN and deposits reached 56.6% of total investment funds. The general insurance industry allocated around 16.5% of investment funds, or IDR 16.04 trillion, in the first semester of 2023 into mutual funds.
Massive Surge: General Insurance Premiums Via Brokerage Reach IDR 14.55 Trillion in Semester I 2023
The Indonesian General Insurance Association (AAUI) notes that brokers are the leading distribution channel for general insurance premiums, with an extraordinary achievement of IDR 14.55 trillion in Semester I-2023.
This figure reflects a growth of 33.2% compared to Semester I-2022, which recorded a premium of IDR 13.79 trillion through the broker distribution channel.
In the second place, the direct acceptance route also experienced a significant increase, generating a premium of IDR 12.1 trillion, up 27.6% compared to Semester I-2022, which only recorded IDR 11.77 trillion.
AAUI Deputy Chair for Statistics and Research, Trinita Situmeang, stated that the general insurance premium distribution structure in Semester I-2023 remained relatively the same.
“However, there is still consistent growth from both brokers and direct acceptance pathways, so there is a balance,” Trinita said at a press conference on general insurance performance in Semester I-2023 on Friday (25/8).
Furthermore, the leasing distribution channel recorded a premium of IDR 6.8 trillion and an increase of 15.6% from Semester I-2022, which recorded IDR 6.2 trillion.
The same thing happened to the agency, which reported an increase of 14.3% with a premium of IDR 6.3 trillion in Semester I-2023, compared to IDR 5.9 trillion in the same period in 2022.
Trinita also noted that bancassurance contributed 4.7%, with premiums reaching IDR 2.97 trillion, while digital distribution currently reached IDR 1 trillion, an increase from IDR 891 billion in the same period in 2022.
Sinarmas MSIG Insurance Claims Reach IDR 1.3 Trillion Due to Pollution Impacts
PT Asuransi Jiwa Sinarmas MSIG Tbk (LIFE) reported that during the 1st half of 2023, they had paid more than IDR 1.3 trillion in insurance claims and benefits. Most of these claims are related to ARI disease.
In June 2023, the five most significant benefit payments for Sinarmas MSIG Life individual customers included various diseases such as diarrhea, typhoid fever, appendicitis, dengue hemorrhagic fever, and COVID-19.
Meanwhile, the five most significant benefit payments related to ISPA for group customers are acute pharyngitis, diarrhea, fever, and acute upper respiratory tract inflammation (cold).
According to Lukman Auliadi, Head of Customer & Marketing at Sinarmas MSIG Life, the decline in air quality in Jakarta and its surroundings has become the main driver for ISPA claims. The number of shares doubled in the second quarter compared to the previous quarter.
“We have recorded more than 12,000 claim cases from January to June 2023, with the number of claims increasing by up to 54% for the total individual and group policies,” he said.
Lukman also reminded the public to be more aware of the health risks around them. He advised them to seek immediate medical care and consider financial protection according to their needs.
However, Lukman also emphasized that payment of claims is part of the company’s commitment to protecting customers. Of the total claims of IDR 1.3 trillion that have been paid, most of them are used to redeem units of Investment-Linked Insurance Products (PAYDI), while the rest are used for health, critical illness, and death claims for individual and group customers, with a total of more than IDR 273 billion.
S&P: The Key Role of Reinsurance in Advancing the Sustainable Growth of Cyber Markets
As cyber insurance remains one of the fastest-growing sub-sectors in the global insurance market, S&P has emphasized reinsurance’s importance in sustainably and effectively developing this market.
Sources reported on the reinsurance news page, S&P, revealed that significant insurers in 2022 are turning over around 50% to 65% of their cyber insurance premiums to reinsurance companies, depending on geographic location. This highlights the heavy reliance on reinsurance within the cyber insurance sector.
In S&P’s view, reinsurance companies will remain a key element in the sustainable and practical development of the cyber insurance market. “The reinsurance market and, ultimately, the retrocession market will be critical in providing the capital and capacity to support further growth in written gross premiums,” the rating agency said.
S&P reports that global insurance premiums in 2022 will reach around US$12 billion and are expected to grow by around 30% per year to around US$23 billion in 2025. To achieve this growth, S&P believes that the role of reinsurance companies is vital, not only because of their capacity but also because of their skills in modeling and underwriting that can help market development.
S&P stated, “In our view, if cyber insurance is to meet future customers’ needs, the industry must focus on risk differentiation, strong underwriting, and providing assistance services in line with the prevention, crisis management, and data recovery.” .”
In the face of changing claims patterns, evolving cyber threats, and significant accumulation of risk, S&P highlighted the opportunities this situation presents to increase reinsurance capacity. The rating agency also notes that several reinsurance companies continuously increase their cyber protection offerings in response to market dynamics.
S&P noted, “Many reinsurance companies are approaching the limit on how much cyber exposure they can handle. However, we do not expect this market to suffer the same weakening it has for major cyber insurers. This is evident from the increased rates in the reinsurance segment during 2023. Reinsurance companies must also find ways to regain profitability in their cyber insurance portfolios.”
After a challenging 2022 due to low profitability and even losses in the cyber insurance portfolio, S&P projects that there will be more rate increases in the cyber reinsurance business in 2023. However, S&P believes that the leading underwriting companies in cyber insurance can bear this increase without burdening policyholders. This may be a critical factor in the sustainable development of the cyber insurance market.
The Tragedy Behind the Accident of a 27-Year-Old Child Dies, Mother Crying, Leaves Insurance Worth IDR 2.6 Billion
A sad story about a mother who lost her child in a motorbike accident has surfaced. Though in deep sorrow, this mother learned that her son had registered an insurance grant for her. Her first child, who has passed away, became a hard worker who started saving at the end of 2021, saving RM 150 or around 500 thousand. The deceased diligently saved the remaining money from his work as collateral for the last two years. This noble act of the deceased moved the mother because she donated RM400,000, which was then doubled to RM809,947.
However, this insurance grant money must be received by the mother after the departure of her child. This was a heavy blow, considering that the mother had previously lost her husband, the father of her child, who has now died.
An insurance agent, who was also a witness to the grant, introduced himself as a friend of the mother’s when he visited her on the day of her son’s death. A few days later, the agent met the mother in person and revealed that the mother was the beneficiary of an insurance grant her late son had signed up for. The mother was shocked and touched to hear this news because she never knew about this insurance. His son had never told him he had been saving for three years.
The insurance grant of RM400,000 that the mother received will double its value to RM800,000 because her late son died in an accident. A video of the witness visiting the deceased’s mother has gone viral on TikTok, and many netizens have grieved and admired the noble actions of the deceased, who remained devoted even though he was gone.
This Sharia insurance agent also invites the public to contribute grants to protect the families left behind, even in small amounts. He warned that living after losing the head of the family can be very difficult, especially if many debts are left behind. He also highlighted how important it is to contribute in small ways to avoid future difficulties when faced with similar situations.
Lightning Achievement: Astra Insurance Wins the 2023 Corporate Reputation Award Again
The company won the 2023 Corporate Reputation Award from The Iconomics for its efforts to build and maintain its reputation. This award is given in recognition of the strategy of PR practitioners, PR Personnel & Company Public Relations who have succeeded in creating a corporate image and managing PR.
The company’s reputation assessment is based on online research with thousands of respondents from various ages and cities, focusing on three primary parameters: Business & Commercial Reputation, People & Leadership Reputation, and Social & Citizen Reputation.
Asuransi Astra has committed to making a positive and sustainable contribution to society and the surroundings. They have undertaken various initiatives, including participating in the Earth Care Relay, focusing on education, health, environment, and entrepreneurship.
In addition, Astra Insurance has provided financial education and literacy as part of their efforts to increase financial literacy in Indonesia, by directions from the Financial Services Authority (OJK). This education is delivered online and offline to multiple stakeholders, including employees, customers, and the community.
This award is proof of recognition of Astra Insurance employees’ hard work and commitment to maintaining and enhancing the company’s reputation and providing proper education about financial management and the importance of insurance for the community.
This information is provided by L&G Insurance Broker – The Smart Insurance Broker.
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