Unitlink Premium Drops 20.84 Percent, OJK: The Insurance Industry Returns to Khittah

Armfalcon.com, JAKARTA — Ogi Prastomiyono, Chief Executive of the Supervision of Insurance, Guarantee Institutions and Pension Funds of the Financial Services Authority (OJK), said that premiums for Investment-Linked Insurance Products (PAYDI) or unitlinks had decreased by 20.84 percent in February 2023.

PAYDI’s premium value decreased from IDR 13 trillion in February 2022 to IDR 10.3 trillion in February 2023. “Even one year since the issuance of OJK Circular Letter Number 5 of 2022 concerning PAYDI, we see that developments over the last 1 year more or less reflect the direction developments in the marketing of PAYDI products in the Indonesian insurance industry,” said Ogi in an official statement in Jakarta, Tuesday (4/4/2023).

Changes in consumer behavior in the insurance industry can also be seen from the decrease in the percentage of PAYDI premiums compared to total insurance premiums from 55.28 percent in 2021 to 43.15 percent in 2022. If we look at the number of insureds in the last five years, the number of insured consumers has decreased by 31.43 percent from 7.75 million in 2018 to 5.31 million in 2022.

This decline is in line with OJK directives which encouraged the insurance industry to prioritize the sale of insurance products that prioritize risk protection compared to insurance products that focus more on returning investment returns such as PAYDI.

“This will push the insurance industry back to khittahas a provider of risk protection for consumers,” he said.

In addition, he said, as of March 14 2023, which is the deadline for adjusting PAYDI product permits, as many as 31 insurance companies that can market PAYDI have been licensed.

“As for other life insurance companies that have been selling PAYDI products, they will temporarily stop selling their PAYDI products until the products are officially registered with the OJK in accordance with SEOJK No. 5 of 2022,” he said.

source : Between