Stock market conditions can have a significant effect on the investment results of the life insurance industry because the portion of investments placed in these instruments is relatively high, according to the Indonesian Life Insurance Association (AAJI).

AAJI executive director Togar Pasaribu said that the investment performance of unit-linked insurance products was poor in 2018 because of challenging capital market conditions.

For this reason, he said, the life insurance industry is advised to boost non-unit-linked products. The strategy is to place investments in long term bonds and the money market, or a combination thereof, he told Bisnis.

Investments in long-term instruments are expected to be able to drive financial results in the life insurance industry this year.

AAJI data show that in 2018, the proportion of life insurers' investments in stocks reached 32.9%, mutual funds, 33.8%; government securities, 14.4%, deposits, 8.6%; corporate sukuk, 6.2%; buildings and land, 1.9% and others, 2.2%