Insurance Industry Premiums Drop to IDR 101.34 Trillion, This is the Cause

The Financial Services Authority (OJK) reported that the accumulated premium income for the insurance sector until April 2023 was IDR 101.34 trillion.

This figure decreased 1.67 percent on an annual basis compared to the same period the previous year.

The insurance industry's premium collection until April also fell 1.3 percent on a monthly basis compared to March 2023 premium income.

Chief Executive for Supervision of Insurance, Pension Funds, Financing Institutions, and Other Financial Services Institutions of OJK Ogi Prastomiyono said the contraction in premiums was driven by lower premiums in the investment-linked insurance product ( PAYDI ) business.

"The accumulation of life insurance premiums fell by 10.25 percent on an annual basis with a value of 57.67 trillion in April 2023," he said in a press conference on the Results of the OJK Monthly Board of Commissioners Meeting, Tuesday (6/6/2023).

Meanwhile, the accumulation of general insurance premiums grew 12.55 percent on an annual basis in April 2023 to IDR 43.67 trillion.

Furthermore, Ogi explained, capital in the life insurance company industry as reflected in risk based capital (RBC) was recorded at 457.79 percent in April 2023. Life insurance RBC decreased compared to March by 460.06 percent.

Meanwhile, the RBC rate for general insurance companies was recorded at 311.16 percent.

The general insurance industry's RBC also slumped compared to March by 315.79 percent. "Even though RBC is on a downward trend, in aggregate the insurance industry's RBC is still above the threshold of 120 percent," said Ogi.