Between 2010 and 2016, the insurance industry's contribution to the banking sector increased by 4.2 times, while the banking industry's contribution to the insurance sector rose by 2.7 times.
The Financial System Stability Committee (KSSK) recently released a report on the financial sector's performance in the first half of 2023. While some areas experienced modest to lower growth, the banking sector in general continued to show a promising trend.
Bank credit saw a year-on-year (yoy) increase of 7.76 percent, slightly lower than the 9.39 percent recorded in May 2023. Similarly, investment credit still grew at 9.60 percent yoy, compared with 12.69 percent the previous month. Third-Party Funds (DPK) witnessed 5.79 percent yoy growth, just slightly below the previous month's 6.55 percent, largely driven by deposits.
While the banking industry showed a relatively stable performance, the insurance sector faced significant challenges in 2023. It stood as the only financial sector experiencing negative growth, at 0.7 percent yoy, despite the country's overall gross domestic product (GDP) growth reaching 5.03 percent yoy.
From an industry perspective, notable disparities emerged between the life insurance and general insurance sectors. The life insurance industry experienced negative growth in gross premiums and claims, by 11 and 7 percent yoy, respectively. On the other hand, the general insurance sector demonstrated relatively positive growth in gross premiums at 7 percent yoy, but faced a larger increase in gross claims of 14 percent yoy.
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This article was published in thejakartapost.com with the title "". Click to read: https://www.thejakartapost.com/opinion/2023/08/11/can-insurance-guarantee-schemes-illuminate-the-industrys-future.html.