Life insurance premium hit IDR 177.66 trillion in 2023, down 7.1%
JAKARTA. Indonesian Life Insurance Association (lit. Asosiasi Asuransi Jiwa Indonesia/AAJI) recorded insurance premium of all industry players reaching IDR 177.66 trillion throughout 2023. This premium income was 7.1% lower than the same period in 2022.
The total premium income recorded originates from 56 life insurance companies listed as members of AAJI.
Head of the Board of Management of AAJI, Budi Tampubolon, claimed that traditional life insurance business becomes the drive behind the industry’s income growth.
“Traditional life insurance products still dominated premium income [of life insurance] with total revenue of IDR 92.33 trillion, increasing 14.1% compared to 2022,” added Tampubolon in Jakarta yesterday (27/2).
In the meantime, the insurance products linked to investments or unit-link products scored total premium income of IDR 85.3 trillion, down 22.6% year-on-year (yoy) from IDR 110.23 trillion.
Tampubolon further explained that based on business sources, continuous premium was the primary driver behind life insurance industry growth. Existing users reported premium income increase of 1.3% from IDR 72.78 trillion to IDR 73.73 trillion at the end of December 2023.
Meanwhile, new users brought in IDR 103.93 trillion. Although bigger in numbers than existing users, premium income from new users was seen declining 12.2% yoy from IDR 118.3 trillion.
The Head of Consumer Literacy and Protection Division of AAJI, Freddy Thamrin, mentioned that in this period, insurance companies listed as members of association have paid claims of IDR 162.75 trillion. There were over 10 million people named as beneficiaries of the claim from life insurance industry.
Death claim saw 8.3% yoy decline to IDR 11.02 trillion. The decrease was also applicable to surrender and partial withdrawal claims. Both types of claims reportedly shrank to IDR 89.93 trillion and IDR 16.96 trillion. On top of these, claims were reported from contract expiration reached IDR 17.7 trillion.
Claim increase was evident in health insurance products. The claims of this product swelled to IDR 20.83 trillion. “As of now, the ratio of health insurance claim to premium income of said product has reached 138%,” Tampubolon revealed.
AAJI said that this health insurance claim surge resulted from medical inflation due to higher costs of healthcare facility, treatment, and medicine.
In order to keep the claim under control, life insurance companies will re-review partnerships with hospitals, evaluate the products, as well as the premium. AAJI is currently working on data exchange among insurance companies in order to create a more transparent, accountable, and efficient health industry. (PP/ZH)
