Indonesia: Motor premiums rise in 1H despite slow market
Source: Asia Insurance Review | Oct 2017
Motor insurance premiums rose by 9% to IDR8.09 trillion (US$610 million) in Indonesia in the first half of this year, despite flat vehicle sales. This performance bucked that of the overall insurance market which saw total premiums fall by 4% to IDR29.1 trillion in the first six months of the year, according to the General Insurance Association of Indonesia (AAUI).
AAUI Executive Director Julian Noor said that there is a niche within the market that contributed to growth. This is credit insurance for car loans, according to a report in Kontan. Because sales in the new car market is lacklustre, general insurance players target consumer financing for the purchase of vehicles.
Mr Julian expects prospects for vehicle insurance business in the second half of 2017 to be better. One reason is the Gaikindo Indonesia International Auto Show held in August. He said that there were new premiums from vehicles sold during what is Indonesia’s largest car show.
“The impact is felt in the third and fourth quarter,” he said.
Motor accounted for 27.8% of total premiums in the Indonesian insurance market in 1H2017. The Indonesia Automobile Industry Association (Gaikindo) said that sales in the first half of this year totalled 534,288 vehicles, a 0.04% increase compared to the same period last year. A