Indonesia: Commodities fuel heavy vehicle insurance
Source: Asia Insurance Review | Sep 2018
The commodity sector in Indonesia, which has revived since the end of last year, has brought blessings to heavy vehicle insurance. This is due to the growth of financing in the heavy equipment sector.
Indonesian General Insurance Association (AAUI) executive director Dody Achmad Sudiyar Dalimunthe said the growth of heavy-equipment financing helped increase insurance demand because the collateral represented by the vehicle will definitely be insured by multi-finance actors, according to a report in Kontan.
For instance, MNC Insurance Indonesia recorded a premium of IDR392bn ($27m) for the first half of 2018. Of that figure, heavy equipment insurance premiums accounted for around IDR13.1bn, equivalent to 3.4%.
Compared to the first six months of 2017 the growth of heavy equipment insurance rose 29%, said MNC Insurance managing director Sylvy Setiawan.
Asuransi Wahana Tata (Aswata) expects heavy equipment insurance premiums in the second half of this year to be better than in the first. Aswata president director Christian Wanandi explained that the catalyst that will support this business is that infrastructure projects are being carried out and the commodity sector continues to expand.
For the first half of 2018, Aswata saw premiums totalling IDR830bn, of which heavy equipment insurance contributions were less than 5%. Even so, the growth of this business line for the insurer was still around 5% year on year.
Mr Christian said that business growth in Kalimantan, Sulawesi and Java showed extraordinary demand for heavy equipment. A