News eDaily11 Apr 2017

Indonesia:Insurers playing increasing role in stock market

In order to maximise yields on their funds, insurance companies continue to increase their share of investment in the stock market, with life insurers being more aggressive in such undertakings.

Data from the Financial Services Authority (FSA) for February 2017 show that the total investments of insurance companies in the stock market reached IDR174.85 trillion (US$13.1 billion), 19.5% higher compared to February 2016, reported Kontan.

In February 2017, the value of life insurance investments in the stock market reached IDR113 trillion, or 32.3% of the total investments of life insurance companies. In comparison, in February 2016, the value of life insurers' capital market investments stood at around IDR86 trillion, equivalent to 29.85% of the total investments of life insurance companies.

Mr Alfred Nainggolan, Head of Research at Capital Connection, said that insurance and pension funds have started to appear in the stock market. But the value of their investments are still low compared to the total capitalisation of the Indonesia Stock Exchange, which reached IDR6,171 trillion, last week.

Mandiri Investa director, Mr Hans Kwee, said: "Pension funds and insurance could be the backbone of capital markets because of their long-term horizons.”


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