Page 16 - Insurance Times September 2021

International News

Indonesian life insurance ting foreign insurers to increase own- around the world, including the recent
ership in local insurance companies approval of our combination by the
industry to recover effective January 2020. This was pre- European Commission, we reached an
The life insurance industry in Indone- viously limited up to a maximum of impasse with the US Department of
sia is forecasted to recover in 2021, 80%. Justice," Aon Chief Executive Officer
driven by increased consumer confi- Greg Case said in a statement.
Increased demand for life and health
dence.
products due to the pandemic has Aon will pay $1 billion as termination
As per the latest data, Indonesia's life prompted insurers to offer new prod- fee to Willis, it said. In June, the De-
insurance industry is projected to grow ucts with COVID-19 specific benefits. partment of Justice (DOJ) had sued to
from IDR185.1 trillion (US$13.1bn) in Recovery in business activity due to block the deal, saying it would reduce
2019 to IDR196.8 trillion (US$13bn) in the gradual reopening of the economy, competition and could lead to higher
2024, in terms of gross written pre- and increased revenue from the prices.
mium (GWP). bancassurance channel in the first half
The DOJ had alleged that combining
of 2021 has led to recovery in life in-
"The Indonesia economy continues to the two large insurance brokers would
surers premium.
face the impact of rising number of harm competition in reinsurance
COVID-19 cases. Restrictions imposed As per the Indonesian Life Insurance broking, retirement and pension plan-
due to the pandemic worsened the Association (AAJI), the industry regis- ning and private retiree multicarrier
economic outlook, which is expected to tered a net profit of IDR62.7 trillion healthcare exchanges.
derail a full-scale recovery in the life (US$4.3bn) in Q1 2021, compared to a
insurance segment in 2021." net loss of IDR460 billion (US$0.03bn) General insurance indus-
during the same period in 2020.
Along with the negative impact of the try in Japan to have mas-
pandemic, decreasing consumer confi- Aon, Willis Towers Watson
dence due to the financial crisis involv- sive growth
ing select state-owned insurers in terminate merger The general insurance industry in Japan
2018-19 also impacted life insurance Insurance brokers Aon Plc and Willis is projected to grow from JPY11.1 tril-
growth in 2020. As a result, life insur- Towers Watson Plc said they had agreed lion (US$104.1bn) in 2020 to JPY12.6
ance premium declined by 7.6% in to terminate their $30 billion merger trillion (US$133.1bn) in 2025, in terms
2020 to be valued at IDR171 trillion agreement and end their litigation with of gross written premiums (GWP).
(US$11.7bn). the US Department of Justice.
As per the latest data, the general in-
To address liquidity concerns, the Finan- The deal would have put London-head- surance industry in Japan is expected
cial Services Authority of Indonesia quartered Aon ahead of the world's to grow at a compound annual growth
(OJK) mandated select insurers to inject largest insurance broker Marsh & rate (CAGR) of 2.6% over 2020-2025,
additional capital. Additionally, the McLennan Cos Inc. primarily due to recovery in economy
government issued regulation permit- "Despite regulatory momentum after witnessing a decline in 2020.

16 The Insurance Times, September 2021