Indonesian General Insurers Shift Focus Amid Automotive Slowdown

Diversification Strategy to Mitigate Risk

The slumping automotive market has put pressure on motor vehicle insurance lines, prompting Indonesian general insurance companies to diversify their portfolios. According to the Indonesian General Insurance Association (AAUI), member companies have been enhancing their diversification strategies to maintain balanced portfolios and reduce dependence on a single premium source.

Shift to More Stable Insurance Lines

Many general insurance companies are expanding their focus to insurance lines that show more stable growth, particularly property insurance and engineering insurance. These sectors have demonstrated strong performance, driven by ongoing development activities and the recovery of commercial sectors. The shift is a strategic response to the volatility in the automotive insurance market, which has been impacted by the overall slowdown in vehicle sales and market activity.

Industry Resilience Through Diversification

The diversification effort is expected to enhance the resilience of general insurance companies against market fluctuations. By broadening their portfolio across different insurance lines, these companies can better manage risks and maintain stability in their premium income. This strategic adjustment is crucial in the current market environment, where certain sectors are experiencing significant downturns.