Indonesia: Insurance execs upbeat about industry prospects this year
Source: Asia Insurance Review | Jul 2016
Indonesia continues to be seen as the most attractive market in Southeast Asia, with the majority of respondents in a survey by PwC Indonesia saying that they believed the financial performance of the insurance industry would grow by 15% or so this year, driven by the low market penetration and sheer size of the country.
The survey was conducted from February to May this year on the Indonesian insurance industry. The respondents of the survey were 32 insurance executives from 26 insurance companies in the country.
“Almost half of the respondents are upbeat about the insurance industry and would book about 20% growth in its financial performance,” PwC Indonesia financial services partner Jusuf Wibisana said.
The expectations that respondents had for 2016 were: 50% expect growth to exceed 20%, and only 16% expected the growth to fall below 10%. The expectation was even higher in the life segment, with 88% of respondents expecting growth to be 15% or greater.
Regulation a major risk for respondents
However, the survey also highlights that many companies continue to have a need to develop and strengthen their risk management function and their strategy for addressing a very dynamic change underway with digitalisation and the impact of technology.
Regulation is seen by the respondents to be a major risk to the industry in the next two to three years.
Lastly, there is a war for talent, noted as among the top three risks by both life and non-life insurers. With the expectation for the continued growth, the need for strong talent recruitment, training and management will only increase.