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| Kuartal I-2022, Ekuitas Reasuransi Menyusut 22% |
In the first quarter of 2022, the equity of the reinsurance industry shrank by 22% year on year (yoy) to Rp 7.5 trillion. The reinsurance industry is expected to be able to absorb the risk of domestic insurance companies.
Data from the Financial Services Authority (OJK) processed by the Indonesian General Insurance Association (AAUI) explains that the reinsurance industry has total assets of Rp 31.5 trillion, an increase of 5% (yoy) in the first quarter of 2022. The increase was influenced by total investment assets, which rose 12 percent to Rp 17.3 trillion, partly because investment returns shot up 37 percent to Rp 244 billion.
Meanwhile, liabilities were recorded at Rp 22.6 trillion or grew 12% (yoy). Under these conditions, equity shrank by 22% to Rp 7.5 trillion. The ratio of investment to technical reserves from reinsurance is 92.9%, below 100%.
Deputy Head of Statistics, Research & Analysis of AAUI Trinita Situmeang said that the decline in equity from reinsurance companies was due to losses recorded at the end of last year. Even so, his party hopes that this condition will not use the capacity of reinsurers to absorb risks from insurance companies.
"In terms of capacity, hopefully it won't be disrupted by some improvements and improvements in risk management. We hope that the coverage capacity and commitment to be able to continue to be re-assured by reinsurance companies will still be carried out," Trinita said at the AAUI Press Conference: General Insurance Industry Data and Reinsurance Quarter I-2022, last week.
OJK data also noted that until the first quarter of 2022, the premium recorded by reinsurance fell 7% (yoy) to Rp 6.5 trillion. Meanwhile, claims paid rose 6% to Rp 2.6 trillion. Reinsurance posted a 125% decrease in underwriting to only Rp 5 billion.
In contrast to this data, data from 6 out of 7 reinsurance companies collected by AAUI noted that premiums fell 18 percent to Rp 5.39 trillion. Meanwhile, the claims paid fell quite a bit by 87.5% to Rp 1.55 trillion, from the previous Rp 12.36 trillion. This suppressed the ratio of reinsurance claims from 187.81% in the first quarter of 2021 to much better at the level of 28.71 percent in the first quarter of 2022.
In terms of premiums, the largest contributor to the reinsurance business was the property reinsurance line, which reached Rp 3.62 trillion, but was recorded at 5.6 percent in the first quarter of 2022. This gain was followed by premiums from the marine cargo of Rp 516 billion, which rose 37%.
An increase was also recorded from the credit reinsurance line which skyrocketed by 1,313.4% to Rp 296 trillion. In addition, there are marine hull which rose 15.6% to Rp 228 billion, engineering increased 25% to Rp 205 billion, and offshore energy Rp 53 billion, an increase of 731%.
Other lines such as motor vehicle reinsurance, energy on evening , aviation, liability , personal accident ( personal accident / PA), suretyship , and various recorded a decrease in premiums. Meanwhile, the decrease in claims was recorded by all reinsurance lines, except for aviation reinsurance.
There are three lines of claims that show a significant decline in value in the first quarter of 2022. First, credit reinsurance by 94.8% to Rp 311 billion from the previous Rp 5.99 trillion. Second, property reinsurance claims fell 79.2 percent to Rp 673 billion from Rp 3.22 trillion. Third, claims for the freight reinsurance line decreased by 83.5%, from Rp 309 billion to Rp 65 billion.
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