Indonesia's life insurance industry marked a strong performance in the first half of 2024, according to a report from the Indonesian Life Insurance Association (AAJI). Total premium income rose to IDR 88.49 trillion, a 2.6% increase from IDR 86.24 trillion in the same period of 2023. The growth reflects effective distribution channel strategies and heightened trust from policyholders, despite ongoing economic challenges.

The bancassurance channel led this growth with a notable 13% increase, contributing IDR 36.92 trillion to total premiums. Agency channels followed with IDR 27.94 trillion, a modest 3.4% increase, while alternative distribution channels experienced a significant 38% rise, amassing IDR 23.64 trillion. These figures underline the evolving dynamics of customer engagement and preference in the insurance landscape.

Concurrently, the number of insured individuals surged by 28.4% to 113.68 million. This expansion was driven by the corporate group insurance segment, which grew by an impressive 54.9%, signaling increased adoption among organizations.

However, the industry also faces financial pressures. Health insurance claims jumped by 26% year-on-year, reaching IDR 11.83 trillion. Individual health claims rose 29.3% to IDR 7.62 trillion, while group health claims increased by 20.3% to IDR 4.21 trillion. These rising claims, driven by medical inflation, pushed the health insurance claims-to-premium ratio to 105.7%, indicating that payouts exceeded premiums collected.

Freddy Thamrin, AAJI’s Head of Literacy and Consumer Protection, emphasized the industry's commitment to maintaining service quality. He highlighted ongoing collaborations with regulatory bodies and healthcare providers to address cost pressures and enhance sustainability.

On the investment side, the industry managed assets totaling IDR 616.91 trillion by June 2024, reflecting a slight 0.3% increase from the previous year. Of this, IDR 194.60 trillion was allocated to government bonds, underscoring the sector's role in supporting Indonesia’s development goals. Other investments included IDR 140.69 trillion in equities, IDR 46.62 trillion in corporate sukuk, and IDR 73.10 trillion in mutual funds.

Despite market volatility, particularly in the stock market, which affected returns, the industry's stable asset base signals resilience. Benny Hadiwibowo, Head of R&D at AAJI, affirmed the sector's commitment to prudent portfolio management to safeguard policyholders' interests.

This report showcases an industry balancing growth opportunities with economic pressures, making strategic adjustments to sustain trust and relevance in a rapidly changing landscape.