Monthly Report: Sluggish Growth in Insurance Industry
- The premium growth of life insurance business premiums reached only two percent, far lower than 10 percent in the general insurance industry in 2019, which shows that the growth opportunity is still wide open. On the other hand, it proves the low ability of the insurance industry to penetrate customers for various reasons, from the matter of low insurance literacy to inadequate regulatory support.
- The insurance industry sees severe challenges in the future. At present, the Financial Services Authority (OJK) is preparing a new regulation to raise insurance company minimum capital from Rp 150 billion to Rp 500 billion in stages. This policy will open up other opportunities in the insurance industry for a business merger.
- Since this year, the government has adopted a new policy for foreign ownership in insurance companies, exempting 80-percent maximum ownership. If there are no domestic investors, they are required to find partners through an initial public offering or a capital market mechanism. Thus, foreign ownership is no longer a problem.
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