SINGAPORE–(BUSINESS WIRE)–Oct 7, 2024–
AM Best has revised the outlook to stable from negative for Indonesia’s non-life insurance segment, citing factors that include robust growth prospects, the potential for compulsory third-party liability (TPL) insurance for motorists, and regulatory changes that are expected to enhance the sector’s long-term financial stability.
The Best’s Market Segment Report, “Market Segment Outlook: Indonesia Non-Life Insurance,” notes two moderating factors, including pressure that remains on underwriting conditions in core business segments and elevated pricing risk due to rapid growth of the electric vehicle market.
Indonesia’s economy grew by 5% in 2023 and is likely to remain robust over the near term, supported by steady domestic demand, rising business investment and fiscal spending, according to the report. The country’s non-life insurance segment reported robust top-line results in the first quarter of 2024. This followed the growth momentum from 2023 with key drivers being the property, credit, health and motor lines of business.
AM Best expects demand for commercial insurance to increase over time under the Indonesia government’s “Golden Vision 2045.” This strategy is designed to transform the economy through plans to modernise and develop the country’s existing infrastructure and increase renewable energy production. Additionally, a regulatory proposal to requiring motorists to have TPL insurance is expected to further bolster insurance demand, given that motor TPL insurance is currently purchased on a voluntary basis.
“Given the regulatory push to implement the policy in 2025, motor insurance demand is expected grow significantly over the medium term and help narrow the country’s insurance protection gap,” said Chris Lim, associate director, AM Best. “Nonetheless, successful implementation of the proposal will require effective product design, robust risk management, and adequate pricing strategies to mitigate potential underwriting challenges.”
To access the full copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=347525.
Chris Lim will give a presentation on AM Best’s market segment outlook for Indonesia’s non-life insurance segment during the 28 th Indonesia Rendezvous, which is scheduled for 9-12 October 2024, at Bali Nusa Dua Convention Center in Bali, Indonesia. Lim’s presentation is scheduled for 1:30 p.m. on Thursday, 10 October. For more information, visit the event website.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visitwww.ambest.com.
Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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CONTACT: Chris Lim, FCII, CFA
Associate Director, Analytics
+65 6303 5018
[email protected] Ong
Associate Financial Analyst
+65 6303 5024
[email protected] Sharkey
Associate Director, Public Relations
+1 908 882 2310
[email protected] Ang
Senior Industry Research Analyst
+65 6303 5026
[email protected]
KEYWORD: ASIA PACIFIC EUROPE INDONESIA SINGAPORE PHILIPPINES
INDUSTRY KEYWORD: FINANCE PROFESSIONAL SERVICES AUTOMOTIVE INSURANCE EV/ELECTRIC VEHICLES
SOURCE: AM Best
Copyright Business Wire 2024.
PUB: 10/07/2024 09:00 PM/DISC: 10/07/2024 09:00 PM
http://www.businesswire.com/news/home/20241007863159/en
