Three foreign insurers will operate in RI<\/p>\n
JAKARTA (JP): The government will soon issue licenses to three
\nforeign insurance companies -- Principle Life, Cigna Life, both
\nof the United States, and QEB of Australia -- to operate in the
\ncountry, says an executive of the Ministry of Finance.<\/p>\n
Shopar L. Toruan, the ministry's director insurance
\ndepartment, said here Saturday that the three companies will
\noperate in cooperation with domestic partners.<\/p>\n
Principle Life has formed a joint venture with E.G. Lita,
\nCigna Life with Niaga Life and QEB, an Australian loss insurance
\nfirm, with Pool Asuransi, he said.<\/p>\n
\"We hope the three foreign companies are willing to transfer
\ntheir insurance know-how to their local partners,\" he told
\nreporters in a press briefing held within the framework of the
\nopening of a meeting of the ASEAN Insurance Council (AIC) here
\ntoday.<\/p>\n
There are 148 insurance companies now operating in the
\ncountry, comprising of 46 life insurance firms, 98 loss insurers
\nand four reinsurers. Out of the companies, 17 are foreign joint
\nventures -- four operating in life insurance and 13 in loss
\ninsurance.<\/p>\n
Shopar said here the presence of foreign insurers in the
\ncountry is still needed as the financial capability of the local
\ncompanies is still relatively low.<\/p>\n
\"Around 80 percent of the country's insurance coverage is
\nreinsured to foreign firms. It indicates the weakness of
\nfinancial capability in the insurance industry,\" he said.<\/p>\n
The growth of both life and non-life insurance companies in
\nthe country remains low as compared to those in other ASEAN
\ncountries.<\/p>\n
The gross premium incomes of the insurance industry rose by 24
\npercent to Rp 3.29 trillion (US$1.56 million) in 1992 from Rp
\n2.65 trillion in 1991. The ratio between the premium revenues to
\nthe country's gross domestic products (GDP) was also still
\nrelatively low, at 1.29 percent in 1992 and 1.17 percent in 1991
\ndespite the high growth in the premium revenues.<\/p>\n
\"Only seven percent of the country's 187 million people have
\nbeen so far covered by the insurance industry,\" he said.<\/p>\n
Shopar said that Indonesia still faces a number of handicaps
\nin improving people's awareness about the advantage of insurance
\ndue to the lack of promotion drives made by insurance companies
\nand a number of reported frauds taking place within the industry.<\/p>\n
He said the growing middle class is a potential market for
\ninsurance companies but many of them are still afraid of being
\ncheated.<\/p>\n
AIC Meeting<\/p>\n
Willy Wiguna, the chairman of the organizing committee of the
\nmeeting of AIC, said that around 50 executives of the council's
\nmembers will participate in the two-day meeting to be opened in
\nSahid Jaya hotel today.<\/p>\n
The meeting will be the 21st annual gathering of the council,
\nwhich groups insurance companies in member countries of the
\nAssociation of Southeast Asian Nations (ASEAN), including Brunei,
\nIndonesia, Malaysia, the Philippines, Singapore and Thailand. The
\nprevious meeting was held in Brunei.<\/p>\n
Willy said that the committee will propose a number of
\nimportant issues to be discussed in the meeting, mostly relating
\nto the latest development of the Asian economy such as the phase
\nof the liberalization of trade within the ASEAN countries, the
\ndevelopment in the insurance market in China and the
\nliberalization of the Indian insurance market.<\/p>\n
In addition to the agenda, the council will also hold a joint
\ndialog with ASEAN Insurance Commissioners to discuss the proposal
\nallowing ASEAN insurance companies to invest five percent of
\nsurplus funds in any of the association's member countries. (hen)<\/p>",
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