Insurance Business Opportunities in Covid-19 Era, Here Is Expert's Explanation

Editor: Putri Larasati Anggiawan

TRIBUNBATAM.id, BATAM - The current global pandemic is considered to have two sides of influence for national insurance.

This is due to Covid-19 pandemic not only pressing the economy, but also threatening the health and life of the community.

This condition causes Covid-19 pandemic to have two sides of influence for the insurance sector.

The increase in demand for insurance in several products, such as health and life insurance, is because people want to protect themselves from a pandemic.

Even so, on the other hand, people's purchasing power is depressed so they stay away from tertiary needs first. It is known, so far insurance has been seen as a tertiary need.

According to BI data, Indonesia's economic growth of minus 5.3 percent in the second quarter of 2020 has undeniably affected the insurance industry.

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Based on economic theory and insurance economics, the demand for insurance is influenced by several factors. One of them is economic growth.

Economic growth will also increase the demand for insurance. This is because the object of insurance is actually the risk of all assets or interests, both goods, services and people that drive the economy.

The currently weakening economic condition has an impact on business operations, either to decline or even to a halt. This condition causes risk to decrease, so that demand for insurance weakens.

The general insurance industry recorded a decline in performance, such as premium income. This is because of the pressure due to the Covid-19 pandemic which has occurred in all sectors including insurance.

Head of Great Eastern Insurance Representative Office, Bambang Harianto, said that when Covid-19 hit, insurance companies tended to be unaffected. However, special sectors such as hotels were recorded as the sectors most affected by the pandemic.

"The decline in the number of foreign tourists will interfere with hotel operations which ultimately will also affect insurance by 15 to 20 percent," he said in TribunBatam Webilog News, Friday (11/9/2020).

On the same occasion, Muhammad Santoso as a representative from Bhayangkara assessed that the pandemic provides new opportunities or hope for the insurance industry.

"We know that this is a time full of uncertainty but we still have to survive with various efforts. On the main side, the current situation is a very worrying situation, but in another segmentation there is a business opportunity here, namely insurance.