The marine hull insurance business in Indonesia is expected to grow by 10 percent this year in terms of premiums, despite the fact that growth was flat in 2017, according to the General Insurance Association of Indonesia (AAUI).
The increase would hinge on whether or not the building and procurement of ships in Indonesia is as planned.
Data published by AAUI shows marine hull insurance premiums dipped by 0.4 percent to IDR1.16trn (US$81.2mn) for the first three quarters of 2017.
The cost of claims increased sharply by 30.2 percent to IDR930bn for the same period. The loss ratio jumped to 80.1 percent for the first nine months of 2017 from 61.4 percent for the corresponding period in 2016, reported Kontan.
AAUI executive director, Achmad Sudiyar Dalimunthe, said he was optimistic that the financial report for the fourth quarter of 2017 would show a positive performance in marine hull insurance. The government has provided various fiscal incentives for the shipbuilding and repairs industry.
Data from the Ministry of Industry (Kemenperin) shows there are 250 companies with a production capacity of at least 1mn DWT per year to build new ships and capable of reaching at least 12mn DWT per year for ship repairs.
Additionally, Achmad said that the Ministry of Transportation has expanded shipping routes, a move which is expected to increase the demand for ships to fill the routes.