Fitch: Slower GDP Growth Won't Derail Indonesian Insurance Growth

Fitch Ratings says in a new report that the low penetration rate of insurance products, improving risk awareness, and rising population and affluence will support demand growth in Indonesia's life and non-life insurance sectors over the medium term. This is despite Indonesia's real GDP growth slowing to 4.7% in each of the first three quarters in 2015. However, Fitch expects annual real GDP growth to pick up to 5.3% in 2016 and 5.5% in 2017, from 4.8% in 2015.

Overall gross premiums written for the life and non-life segments increased by around 15% in 2014. Total industry premiums rose 7.8% (annualised) in 1H15.

The non-life insurance industry has posted favourable loss ratio that was consistently below 50% over FY10-FY14. Most domestic reinsurers' underwriting margin, as measured by their combined ratios, has remained steady over the past three years, driven by manageable losses from catastrophe events.

The report titled 'Indonesian Insurance Dashboard 2015' is available at www.fitchratings.com or by clicking on the link in this media release.