Aetna committed to RI insurance market
JAKARTA (JP): International insurance company Aetna International Inc. remains upbeat about its operations in Indonesia despite the nation's worst-ever crisis.
Company president and CEO Frederick C. Copeland Jr. said on Thursday the rapid growth of the industry would continue this year even though the country was still beset by economic difficulties.
He said Aetna's joint venture PT Aetna Life Indonesia continued to record promising gains amid the slump in other business sectors.
"We have seen that our company has grown very rapidly here in the past three years. We are expecting a 50 percent growth next year," Copeland told The Jakarta Post during a business visit.
He predicted growth in the industry would remain steady this year because many people considered life insurance products to be long-term investment alternatives.
People are currently looking for better and safer places to invest their money because many companies and banks are experiencing internal problems, Copeland said. Life insurance policies are considered good investment alternatives, he added.
"Our company growth in Indonesia is higher in the last three years compared to Malaysia, Taiwan and Hong Kong. Our biggest investment in Asia is in those three countries, but Indonesia has the biggest growth."
Aetna Life Indonesia president John V. Jones said the firm expected to gain Rp 41 billion (US$5.5 million) in premium income this year, an increase of 14 percent from last year's Rp 35 billion.
The number of the company's policyholders is expected to increase by 12 percent, reaching 74,000 this year from 66,000 in 1997.
Jones admitted that the economic crisis, which has hit the country since July last year, had a major effect on the company's business, especially on its U.S dollar-based policies.
Many Aetna clients terminated their U.S. dollar-based insurance contracts to avoid the high increase in premiums resulting from the rupiah's huge depreciation against the dollar.
He said many dollar-based policyholders could no longer afford to pay their premiums.
The company recorded a 50 percent increase in the number of rupiah-based policies because many of its clients converted their dollar policies to rupiah ones.
Aetna Life Indonesia is 80 percent owned by Aetna International Inc. and the remainder by PT Danamon Sanggrahan.
The insurance company, which started operations in 1995, has 43 offices operating in 27 cities nationwide. Its 300 employees and 1,000 agents cater mainly to middle to upper class individuals and group customers.
It offers insurance products for retail customers and individuals, such as whole life insurance, health, endowments and employees benefit packages.
Copeland declared that Aetna Indonesia's clients should not worry about the company's liquidity since additional capital would be injected next year.
"We've committed to put some capital in Aetna Indonesia next year, but I'm not sure how much yet. But in Asia globally we will put somewhere between $25 million and $50 million next year." (gis)