Aetna committed to RI insurance market
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)