Allianz Life reports first annual profit, but premiums down
Allianz Life reports first annual profit, but premiums down
The Jakarta Post, Jakarta
Allianz Life Indonesia -- a leading provider of life and health
insurance -- has reported its first ever profit in its eight
years of operation, despite a 9.9 percent drop in its premiums
collected in 2004.
"We have a profit of Rp 3.6 billion (US$378,000) for 2004,"
the company's chief financial officer, Rianto Djojosugito, told
The Jakarta Post on Tuesday.
He said this nominal profit, a reversal from last year's loss
of Rp 42 billion, represented a significant turning point for the
insurer, which has been in operation since 1996.
"It's the nature of insurance companies to be in the red for a
few years," said Rianto.
"The profits will now only continue to grow."
The profit for 2004 occurred despite a drop in gross weighted
premiums from Rp 719 billion in 2003 to Rp 648 billion, which
Rianto attributed to a combination of factors.
He said that one of the most significant factors, felt by the
industry as a whole, was the scaring off of potential customers
due to the case affecting a local unit of the UK-based Prudential
Life Insurance.
Prudential was declared bankrupt by the Commercial Court in
April 2004 because of an alleged debt to one of its agents. The
court decision was later reversed by the Supreme Court.
Rianto said the drop-off in premiums was also due to some
clients, chasing short-term gains, by not renewing their life
insurance policies.
He added that a significant amount of the company's record
premiums generated in 2003, 72 percent higher than in 2002, came
from "investment-oriented" individuals who were seeking quick
returns by purchasing single, one-time premium policies.
However, despite these factors, the company, which boasts a
216 percent risk based capital, well above the government-
mandated level of 120 percent, expects profit of between Rp 20
billion and 30 billion this year, according to Rianto.
He also said that the company's first quarter results were
"strong" and in line with its target of increasing its gross
weighted premiums by 56 percent to Rp 1 trillion.
He said that Indonesia's low penetration of insurance policy
holders, where only 2 percent of its 230 million population had
life insurance, continued to present a remarkable opportunity for
the company.
Allianz Life Indonesia is one of the top 10 life insurance
companies in the country.
With assets under its management of more than Rp 1.17
trillion, the company insures more than 300,000 people. (002)