Indonesian Motor Vehicle Insurance Market Forecast to Remain Stable Through 2026

Moderate Growth Expectations

The Indonesian General Insurance Association (AAUI) has projected that the motor vehicle insurance sector will maintain stable performance through the end of 2025 and 2026. According to Budi Herawan, Chairman of AAUI, the forecast is based on the current state of vehicle sales, which are showing signs of recovery but at a moderate pace.

Factors Influencing the Forecast

The AAUI's assessment takes into account the ongoing recovery in automotive sales, though it notes that this recovery is not happening at an aggressive rate. Herawan explained that while there are positive indications of improvement in vehicle sales, the overall market remains characterized by moderate growth. This cautious outlook reflects the broader economic conditions affecting both the automotive and insurance industries.

Implications for the Insurance Sector

The predicted stability in motor vehicle insurance performance suggests that insurers will need to maintain a careful balance between growth and risk management. As the market grows at a moderate pace, insurance companies will likely focus on refining their underwriting practices and potentially exploring new product offerings to remain competitive.

Market Context and Future Outlook

The AAUI's forecast underscores the interconnectedness of the automotive and insurance sectors in Indonesia. As vehicle sales continue their gradual recovery, the insurance industry is expected to follow suit, albeit at a measured pace. This outlook highlights the need for insurers to remain agile and responsive to market developments while maintaining prudent risk management practices.