Indonesia remains the most attractive insurance market in Southeast Asia as local insurers expect the industry to sustain strong financial growth in 2016 despite the recent economic slowdown, according to a new survey by PricewaterhouseCoopers (PwC).
The majority of the survey respondents, who were 32 insurance executives from 26 insurance companies in Indonesia, believed that the financial performance of the insurance industry would post a double-digit growth this year, the Jakarta Post
“Almost a half of the respondents are upbeat the insurance industry would book about 20 percent growth in its financial performance,” the publication quoted PwC Indonesia financial services partner Jusuf Wibisana as saying.
The survey results showed that only 16% expected the growth to fall below 10%. In the life segment, 88% of respondents projected the growth to be 15% or higher.
The growth prospects were driven by the low market penetration and sheer size of the country, the survey noted.
“Indonesia continues to be seen as the most attractive market in Southeast Asia. Almost all respondents felt the market was either the most attractive or somewhat more attractive,” the survey said.
“Low penetration rates and a growing, large population make Indonesia the market with the most potential in Southeast Asia.”
Raising market awareness and regulation were seen to be the key issues for the industry. Price competition was considered the top challenge in the non-life sector and distribution network and macroeconomic conditions were the biggest concerns in the life segment.
Human talent was among the top three risks to insurers’ achievement of growth targets in 2016 and over the next two or three years.
“There is a war for talent, noted as the #3 risk by both life and non-life insurers. With the expectation for continued growth, the need for strong talent recruitment, training and management will only increase,” said David Wake, PwC Indonesia financial services partner.
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