JAKARTA. The mutual fund assets in Indonesian life insurance industry continued to decline. Within the past 3 years, they have shrunk by 52.71%.

Head of Investment Department of Indonesian Life Insurance Association (AAJI), Rahmat Syukri, mentioned that in 2021, total investment funds placed in mutual funds reached IDR 165.37 trillion. However, it dropped to IDR 105.35 trillion in 2022, and further to IDR 78.2 trillion in 2023.

The investment placed in stocks has also fluctuated, from IDR 149.6 trillion in 2021, to increasing to IDR 158.39 trillion in 2022, and finally dropping to IDR 150.36 trillion in 2023. The investment rebalancing has been seen in Government Securities (lit. Surat Berharga Negara/SBN), which recorded an increase from IDR 98.96 trillion in 2021 to IDR 183.23 trillion in 2023.

This rebalancing occurred after the issuance of Circulating Letter of Financial Services Authority (OJK) No.5/SEOJK.05/2022 regarding Unit-linked Insurance Plan (SEOJK PAYDI). This regulation changes the course of investment, placement, and marketing strategies of unit-linked insurance products. “We always prioritise prudence and adjust investment placement with the company’s business characteristic,” Syukri explained.

Beside mutual funds and SBN, investment funds from insurance companies in late 2023 were seen being placed in several kinds of assets, including land and building (IDR 15.71 trillion), direct investment (IDR 24.98 trillion), deposits (IDR 40.05 trillion), and others (IDR 4.56 trillion).

In total, in 2023, the assets of life insurance industry had reached IDR 614.61 trillion, growing 0.7% from last year’s number of IDR 610.38 trillion. Total investment funds also saw growth of 0.8% yoy to IDR 541.17 trillion from IDR 537.1 trillion in 2022. (PP/ZH)