Sunday, April 22, 2018

Fitch sees further growth in Indonesia’s insurance sector

Fitch expects Indonesia’s insurance industry to benefit from the recent positive economic developments.

In its latest forecast, Fitch said the country’s gross domestic product will likely grow 5.3% by end of 2017, and with such a strong performance it is likely to boost Indonesia’s insurance premium growth.

Despite the sluggish growth in non-life premiums in Indonesia in the first quarter of the year, Fitch said it expects to see a surge in property, credit guarantee, and engineering insurance soon after a large government budget that was set aside for infrastructure comes into play.

In 2016, the loss ratio for non-life improved on lower expense claims for property and motor vehicles.

This downward movement, along with manageable protection from reinsurance coverage and expected growth in non-life premiums, is seen to spill over this year.

Fitch likewise forecast that motor premiums will not be significantly affected by the tariff hike that took effect in April of this year.


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