The motor insurance industry in Indonesia is expected to see a significant growth over the next four years, according to a new report from the UK based research firm BRICdata.
During the review period (2007-2011), the volume of motor insurance policies sold in Indonesia grew at a CAGR of 24.36%.
The growth of the Indonesian motor insurance category is supported by strong growth in automobile sales.
Over the forecast period (2012-2016), the growth of the Indonesian motor insurance category is expected to grow at a CAGR of 10.33% and reach volume sales of 25.1 million in 2016.
Third-party motor insurance, which is compulsory in Indonesia, is anticipated to drive demand for motor insurance in the country.
The Capital Market and Financial Institution Advisory Agency (BAPEPAM-LK) has placed a strict capital requirement on insurance companies in Indonesia and companies that fail to meet the above regulation will be penalized.
BAPEPAM-LK’s new regulation is designed to strengthen the Indonesian motor insurance category and bring in some consolidation.
In order to sell motor insurance products, Indonesian insurance companies are increasingly entering into agreements with banks.
The full report ‘Emerging Market and Investment Opportunities in the Indonesian Motor Insurance Industry to 2016’ is available from BRICdata. Click here for more details.