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BMI View: We have a positive long-term outlook for Indonesia's insurance sector over the 2016-2020
period. With an average annual growth rate of over 10% for total premiums and low rates of penetration
and density, we expect the market to become increasingly attractive to (foreign) investors as there is scope
for development. Particularly basic motor and property lines should grow significantly over the coming
years, as household disposable incomes continue to rise. Some regulatory barriers may, however,
potentially put a lid on the sector's ongoing development.
Key Updates and Forecasts
? Forecast to account for 69% of total written premiums in 2016, life insurance constitutes the larger
segment of Indonesia's insurance sector. Over the next five years, the life market should expand by
roughly 12% annually on average - reaching USD14.6bn in 2020.
? Indonesia's smaller and less developed non-life insurance segment is expected to grow by 9.3% annually
on average over the 2016-2020 period, which means that it will be outpaced by the faster growing life
segment. Non-life premiums will be driven primarily by motor and property insurance. In 2020, non-life
premiums should amount to USD5.9bn.
? Insurance premiums growth in Indonesia over the next five years should mainly be pushed upward by the
growing levels of household disposable incomes, which will improve the affordability of many of the
marketed insurance products. However, it is important to continue to raise customer awareness of the
benefits of life and non-life insurance in general, in order to further generate an uptick in demand