Indonesian Motor Vehicle Insurance Premiums Decline in Q3 2025

Economic Challenges Continue to Impact Industry Growth

The Indonesian motor vehicle insurance sector experienced a 4% year-on-year decline in premiums to Rp14.11 trillion in the third quarter of 2025, as reported by the Indonesian General Insurance Association (AAUI). While this decline represents an improvement from the 6.2% year-on-year drop observed in Q2 2025, it signals that the industry is still navigating through challenging economic conditions.

Factors Contributing to Premium Decline

Industry expert Irvan Rahardjo attributes the slow recovery to two primary factors: sluggish banking credit growth and subdued consumer purchasing power. The lackluster performance in these areas has directly impacted the motor vehicle insurance sector, as reduced vehicle purchases and financing activities lead to lower insurance demand.

Industry Outlook for Remainder of 2025

While the Q3 2025 premium decline was less severe than the previous quarter, industry observers remain cautious about the prospects for a robust recovery by year-end. The ongoing economic challenges suggest that the motor vehicle insurance sector will likely continue to face headwinds unless there is a significant improvement in consumer spending and credit growth.