KONTAN.CO.ID - JAKARTA. The volatile condition of the Covid-19 pandemic did not affect the investment assets of the life insurance industry, which in fact continued to grow in the capital market. Mutual fund assets are the largest for the industry's investment asset portfolio.
If you look at the data from the Indonesian Life Insurance Association (AAJI) in the first quarter of 2021, the life insurance industry allocates an investment of 62% or equivalent to Rp. 316.68 trillion in the capital market in the form of mutual funds and stocks and Rp. 5% in the form of Government Securities (SBN).
If you want to compare it with the same period last year, these three assets are both experiencing growth. Mutual funds grew 16.9% year-on-year (yoy), while stocks and government securities grew 25.04% yoy and 15.76% yoy, respectively.
“Assets in stocks continue to grow, right, because many good stocks are still at cheap prices. And don't forget, the life insurance industry generally invests in the long term,” said Executive Director Togar Pasaribu to KONTAN, last weekend.
However, Togar said, even though stock prices are cheap, especially good issuers, it can be a good opportunity to increase stock investment assets, mutual fund assets are still considered to be the assets with the largest portfolio. This is because mutual fund assets have a relatively lower risk than stocks.
“In recent years, the allocation has always been the same. Mutual funds are the biggest, then stocks. In the future, there may not be any changes," added Togar.
Prudential Life as a life insurance company admitted that it experienced growth in investment assets until the first quarter of yesterday. The company recorded a growth of 17% to Rp67.3 trillion compared to the same period in the previous year.
Prudential Indonesia's Chief Investment Officer Novi Imelda said that this performance was achieved thanks to the investment strategy implemented with Eastspring Indonesia in managing customer investment funds, supported by external factors in the form of the recovery of the national economic sector and the government's mass Covid-19 vaccination program.
In the future, Prudential Life will focus on placing equity investment funds in various sectors that tend to be resilient when economic growth slows and in line with long-term economic growth which is expected to reduce volatility.
"As for bond investment funds, we concentrate on government bonds which are considered more liquid," Novi told KONTAN.
BNI Life also experienced growth in investment assets. The company recorded total investment assets until June 2021 of Rp 19.3 trillion, which means an increase of 11.4% yoy,
"This increase is influenced by premium receipts and investment returns, where our year-to-date achievement of non-linked investment returns until June 2021 is 99.8% of the budget," said BNI Life Finance Director Eben Eser Nainggolan.
This subsidiary of the bank with the 46 logo has the largest portion of investment assets from fixed income, which includes the composition of mutual funds, amounting to Rp 14 trillion or 73% of the total portfolio. Eben said that the largest portion of fixed income is because the market tends to be more stable than the stock market, which is quite volatile at the moment.
Eben also explained that in the second half of this year, his party will trade by taking advantage of the momentum by buying potential IPOs and lowering money market allocations to maximize investment while still adhering to the company's investment strategy policies and regulatory provisions.
"We reduce the money market running to government bonds and also shares of digital-based companies that will IPO because if there is a digital story, it's usually good. We also still dare to place assets in stocks because the analyst's year-end predictions are still there for the index price to be better than it is now, “explained Eben.
There is another BRI Life which also experienced growth in investment assets as of June 2021 which reached 34% yoy. This means that the company's total investment assets currently reach around Rp. 13.6 trillion.
Just so you know, the largest portion of BRI Life's investment assets is placed in Government Securities, which reaches 50%. This is in line with the characteristics of long-term liabilities.
"We continue to adjust existing assets with the characteristics of liabilities and maintain liquidity to be able to pay claims, and we optimize returns in this corridor," said BRI Life's President Director, Iwan Pasila.
Read more: https://keuangan.kontan.co.id/news/meski-pandemi-aset-investasi-industri-asuransi-jiwa-terus-bertumbuh-di-pasar-modal
