Abstract
This paper is aimed at analyzing the impact of the covid-19 pandemic on the performance of general insurance subsector in Indonesia. Secondary data obtained from the Indonesia Financial Service Authority which include annual growth rate (year on year) of total asset, technical reserve, investment, equity, and net premium income for the periods between April 2019, 2020 and 2021 to March 2019, 2020 and 2021 were used in this study. Using the dependent sample t-test, it is revealed that the impacts of the covid-19 pandemic on the performance of general insurance subsector were varied. The growth rates of the total asset, total investment, and net premium income of general insurance subsector significantly decreased during the covid-19 pandemic. The decline of these variables was influenced by the covid-19 pandemic. In the meantime, the growth rate of technical reserve and equity were not significantly influenced by the covid-19 pandemic. The growth rate of these variables decreases; however, the degree of decreases was not statistically significant. Findings of the study indicate that further study is required to examine in more detail the factors that potentially affect the performance of the general insurance subsector in relation to the covid-19 pandemic.
Highlights
Financial institutions play an important role in the economic system, namely as a source of economic life in the form of providing facilities for the flow of funds in and out of funds or capital circulation
Insurance sector in Indonesia—as one of the sectors in the financial industry which include banking, capital markets, pension funds, financial institutions, and other financial service institutions—plays an important role in strengthening monetary and investment activities by means of providing the long-term funds needed for the development of physical and social infrastructure while at the same time increasing the ability of business actors to take risks
The economic damage caused by the COVID-19 pandemic is largely due to falling demand, meaning that fewer consumers are willing to buy goods and services available in the global economy
Summary
Financial institutions play an important role in the economic system, namely as a source of economic life in the form of providing facilities for the flow of funds in and out of funds or capital circulation. Insurance sector in Indonesia—as one of the sectors in the financial industry which include banking, capital markets, pension funds, financial institutions, and other financial service institutions—plays an important role in strengthening monetary and investment activities by means of providing the long-term funds needed for the development of physical and social infrastructure while at the same time increasing the ability of business actors to take risks. The insurance sector plays an important role in maintaining financial system stability for a number of reasons, three of which are (i) insurance companies are large investors in the financial market, (ii) the increasing relationship between insurance companies and banks, and (ii) by insuring the risks they face, insurance companies protect the financial stability of households and firms. Insurance has a substantial contribution towards the balance of payments, positive financial 184 | Ilomata International Journal of Tax & Accounting
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