AM Best has maintained its negative outlook for the Indonesian non-life insurance market.
According to the rating agency, the poor performance of credit insurance is a systemic problem that continues to affect the market. Inadequate premium rates and overexposure to credit insurance during a period of economic stress have weakened the financial profiles of several local insurers and reinsurers.
The motor and health classes of business are also under pressure due to rising labor, spare parts and medical costs.
AM Best [4] expects the sector to achieve higher growth in 2022. This would be driven by the resumption of activity after the Covid-19 pandemic.
However, the rating agency expects market growth to be below pre-Covid-19 levels due to the global recession, inflationary pressures, and domestic monetary tightening.
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