SINGAPORE, Oct 31 (Bernama-BUSINESS WIRE) — AM Best is maintaining its negative market segment outlook on the Indonesia non-life insurance segment, citing challenges in credit and motor insurance and ongoing macroeconomic uncertainties. Claims frequency normalization, which has the potential to dampen the segment’s profitability, also underpins the negative outlook.
In a new Best’s Market Segment Report, “Market Segment Outlook: Indonesia Non-Life Insurance,” AM Best notes that it expects the segment to exhibit higher growth in 2022, supported by the resumption of domestic activity and demand as Indonesia transitions to treating COVID-19 as endemic and moves away from strict lockdowns seen up to 2021. However, market growth is likely to fall short of the levels seen prior to the pandemic given the downside risks to domestic economic expansion, including a potential global recession, inflationary pressures and domestic monetary tightening.