Analysis of life insurance investment composition

Abstract

Economic recession and global mettle down have brought the question of insurance company investment to the forefront. Growing attention has shifted to the pattern of investments by the insurance and question of how to evaluate such investments. The aim of this research is to evaluate investment compositions which are made by life insurance companies in Indonesia, as well as to know the effects on the performance of Insurance companies. The number of insurance companies who have been evaluated is 43 life insurance companies, taking into account the composition of the investment made by each company for 3 years, and analyzed using regression equations that serve as a model of analysis to see the influence of the composition of investment on the performance of life insurance companies. Factor Analysis is used in this research to provide a way of explaining the observed variability in the investment pattern of Indonesia life insurance industry. Of the various types of investments made by insurance industry participants, mutual funds and direct investments indeed affect the investment income. However, in order to avoid the risks and to add various types of investment income, this must still be done with the portion of funds that do not exceed government regulations.