Astra Buana expects 25% rise in premium income

JAKARTA (JP): PT Asuransi Astra Buana's premium income is expected to increase by 25 percent to Rp 170 billion (US$47 million) this year despite the impact of the current monetary crisis.

The company's vice president Hardi Montana said yesterday the company's total premium income already reached a total of Rp 149 billion as of September this year.

"We will not revise the target, but in a monetary condition like this, we would not expect more," Hardi said of the impact of the sharp fall in rupiah against the U.S. dollar.

Asuransi Astra Buana, a subsidiary of PT Astra International, focuses its business in motor vehicle insurance through its Garda Otto service.

Meanwhile, the company's finance and administration director Natsir Natanagara said the current currency crisis had an indirect impact on insurance companies' premium income due to some project postponements.

Natsir said the rupiah's depreciation against the U.S dollar had, for example, raised Astra Buana's claim payment due to the price increase of spareparts.

"But the increase was very little," he said.

Natsir admitted that the rupiah's drop could hike the company's investment revenues due to the increase of interest rates as a result of the tight monetary policy imposed by the government since early August.

He said the company's premium income denominated in U.S dollars reached at least five percent, while its investment in the currency reached around 2.5 percent of its total investments.

Indra Baruna, the company's business support manager said that the company had paid around Rp 27.2 billion in claims during the January-September period this year.

Indra noted that 92 percent of the amount was claimed for car collision cases, while the remaining eight percent was claimed for stolen cars.

He said by the end of September, the company had given compensation for 863 units of stolen cars.

"At least 55 percent of claim payments, or as much as Rp 14.9 billion, was paid for minor-loss cases, while 45 percent, or Rp 12.2 billion, was for total-loss cases," Indra said.

Astra Buana, which was established 41 years ago, currently has 360,000 policy holders throughout Indonesia.

The company's total assets were put at Rp 180 billion last year, an increase of 38 percent from Rp 130.26 billion in 1995, putting it among the top six insurance companies in Indonesia in terms of assets. (08)