Page 18 - Insurance Times March 2022

ated stimulus programs, will support ers across a range of lines. Flexibility is 2020 to IDR265.3 trillion ($17.4bn) in
the insurance industry’s growth in the likely to be the key, but the cheaper 2025, in terms of gross written premi-
country.” premiums that come with it are also ums (GWP), according to GlobalData,
The government initiated various unlikely to suit insurers who are often a leading data and analytics company.
facing increased risk – particularly in
stimulus programs such as income tax According to GlobalData, the Indone-
commercial lines.”
reliefs, re-introduction of the 13th sian life insurance industry is poised for
monthly pension scheme, and an in- The most obvious issue for insurers is a strong recovery in 2022 driven by
crease in administrative wages are commercial property. So far, this line increased insurance awareness due to
expected to improve household con- has seen premiums increase signifi- the COVID-19 pandemic and improving
sumption and support the Hungarian cantly since the start of the pandemic. economic conditions.
insurance industry which is expected to However, this increase can be attrib- Deblina Mitra, Senior Insurance Analyst
grow by 5.3% in 2021. uted to claims inflation.
at GlobalData, comments: “Life insur-
Carey-Evans explains: “Rising premium ance industry in Indonesia rebounded
Insurers need to adapt prices will only make it harder for in- strongly in 2021 with the pandemic
policies as majority of UK surers to maintain customers, espe- highlighting the financial benefits asso-
cially while fewer people are in offices. ciated with life insurance products,
consumers intend to con- It is perhaps a line that insurers will thereby supporting its demand.”

tinue working from home need to be flexible in going forward, Life insurance growth was also sup-
offering some companies flexible em-
post-pandemic ployee liability rates based on how ported by a stable macroeconomic
The vast majority of UK consumers many people are in the office on a environment led by the government’s
accommodating fiscal and monetary
believe they will continue to work from particular day, for example.” policy. These policies created a stable
home for at least two days a week
The same can be said for personal mo- investment environment for insurers
post-COVID-19, which will have long- tor insurance policies. Commuting will and allowed them to offer products
term effects on a range of insurance be one of the main reasons for people with attractive returns. The trend is
lines, according to GlobalData, a lead- having cars, and especially their mile- expected to continue in 2022, and the
ing data and analytics company.
age. Employees now working one or two life insurance industry is projected to
GlobalData’s 2021 UK Insurance Con- days a week may want to retain their grow by 8.5% in 2022.
sumer Survey found that only 19.1% of cars but are likely to feel they should be
Endowment is the leading business line
respondents believed they would be in paying less than when they were driv- in Indonesia’s life insurance industry
the office for four or five days a week ing to and from work every day. accounting for over 82% of the GWP
after the pandemic, compared to Carey-Evans adds: “Insurers face more in 2020. Stable market returns on unit-
53.2% of respondents who believed of a threat from competitors and start- linked products despite a pandemic-
they would be in the office for two or ups here, as pay-per-mile car insur- driven slowdown in 2020 and 2021
three days a week. The survey was ance is becoming more mainstream supported demand for endowment
conducted in Q3 2021, and had 4,000 and fits perfectly with post-COVID-19 products. Additionally, in 2020, the
respondents, so over a year into the employees. regulator allowed many insurers to sell
pandemic, which suggests consumers unit-linked products online, thereby
have a good idea of what their situa- Driven by insurance aware- increasing its accessibility and aiding
tions will be. growth. These factors will continue to
ness and economic recov- support endowment insurance which is
Ben Carey-Evans, Insurance Analyst at
GlobalData, comments: “This isn’t nec- ery, life insurance industry expected to grow by 8.2% in 2022.
essarily bad news for insurers, but they of Indonesia to witness Protection insurance products such as
will need to adapt several policies to term life and personal accident and
fit the new climate. The challenge for 8.9% CAGR in 2025 health (PA&H) collectively accounted
insurers is that the working world has The life insurance industry in Indone- for 15% of the life insurance GWP in
suddenly evolved by decades in the sia is projected to grow at a compound 2020. Both these lines are expected to
space of one event. This requires them annual growth rate (CAGR) of 8.9% record a growth of around 9% each in
to adapt quickly or risk losing custom- from IDR173.0 trillion ($11.8bn) in 2022. R

18 The Insurance Times, March 2022