Unit-linked life insurance plans are likely to remain popular in Indonesia, despite the battered domestic stock market, reports The Jakarta Globe.
"Unit-linked schemes are still attractive, even if the current global crisis has undermined the value of some of them," said Mr Tatang Widjaja, president director of Sequis Life. He estimates that only 10% of unit-linked products sold in the country had equities as underlying assets.
"Therefore, the fall in the Indonesian stock market has yet to dampen sentiment in the insurance industry as a whole," he said. "I haven't seen people rushing to insurance companies to cash in their policies."
The majority of unit-linked products, he says, involve investments in fixed-income instruments, such as government and corporate bonds. Even then, only a small portion of the funds in the unit-linked products are invested in those instruments, with the majority being set aside for insurance protection.
"Unit-linked plans have become very popular in the last four to five years, and account for the bulk of premium income for almost all insurers right now," said Mr Randy Lianggara, a member of the Indonesian Life Insurance Association and the president director PT AXA Life. Nevetheless, he adds that most investors now prefer safer fixed income, or bond and cash funds, as share prices fall as a result of the global market plunge.
"Unit-linked schemes are still attractive, even if the current global crisis has undermined the value of some of them," said Mr Tatang Widjaja, president director of Sequis Life. He estimates that only 10% of unit-linked products sold in the country had equities as underlying assets.
"Therefore, the fall in the Indonesian stock market has yet to dampen sentiment in the insurance industry as a whole," he said. "I haven't seen people rushing to insurance companies to cash in their policies."
The majority of unit-linked products, he says, involve investments in fixed-income instruments, such as government and corporate bonds. Even then, only a small portion of the funds in the unit-linked products are invested in those instruments, with the majority being set aside for insurance protection.
"Unit-linked plans have become very popular in the last four to five years, and account for the bulk of premium income for almost all insurers right now," said Mr Randy Lianggara, a member of the Indonesian Life Insurance Association and the president director PT AXA Life. Nevetheless, he adds that most investors now prefer safer fixed income, or bond and cash funds, as share prices fall as a result of the global market plunge.
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