The Indonesian Life Insurance Association (AAJI) says that the sector saw a fall in revenue in the first quarter of 2022, which was driven by a shift in consumers’ perspective on buying life insurance.
AAJI chairman Budi Tampubolon disclosed that total income dipped by 0.6% to IDR62.3tn ($4.2bn) in the first quarter of 2022, from IDR62.63tn in 1Q2021, according to a report by Bisnis.
“The downward pressure on total income was caused by a decrease in premium income, reinsurance claims and other income. Especially for premium income, on closer inspection, it turns out that there was a shift in customer focus prioritising long-term protection,” he said.
Based on AAJI data, unweighted premium income in 1Q2022 experienced a drop of 14.7% year on year to IDR48.9tn whereas weighted premium fell by 6.8% to IDR27.86tn.
For weighted premium income, regular-premium business dominated in 1Q2022, commanding 91.6% of total premium income. Single-premium business accounted for the remaining 8.4%. Regular premiums of IDR25.51tn were posted for 1Q2022, down by 4.9% year on year. Single-premium business totalled IDR2.35tn, plunging by 23.3% from 1Q2021.
A similar picture can be seen in unweighted premium income, where insurance products linked to investments (PAYDI) saw an 18.9% tumble to IDR29.07tn in 1Q2022 compared to the corresponding quarter in 2021. Traditional life products, with premiums of IDR19.92bn, only decreased by 7.9% year on year.
The number of holders of PAYDI products fell by 8.2% year-on-year in the January-March 2022 period to 6.12m, compared to 1Q2021.
Mr Budi said that the decline in PAYDI sales was due to an increased preference for protection plans. A