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The Indonesian General Insurance Association (AAUI) states that general insurers must begin evaluating the performance of credit insurance as lending practices are disrupted by the coronavirus pandemic.

AAUI executive director Dody Achmad Sudiyar Dalimunthe explains that the slowdown in credit insurance performance could continue as a result of the COVID-19 pandemic. Disrupted economic conditions have caused difficulties in credit activities, according to a report in

Declining purchasing power has the potential to hamper the ability to repay credit. This will affect the performance of finance companies or banks, and ultimately affect the performance of credit insurers.

Mr Dody says that AAUI has reminded its members to start evaluating the performance of credit insurance and prepare strategies to maintain overall company results. Although credit insurance is not the biggest line of insurance business, credit insurance is considered to have the potential to grow.

He said that credit insurers need to tighten their underwriting analysis. Insurance companies need to coordinate with financial institutions regarding debtor criteria in extending credit. It is intended that the quality of financing is maintained so that it will not cause a burden.

The decline in the performance of credit insurance began to be seen in the first quarter of this year. Insurers need to anticipate the impact of the spread of COVID-19.

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