Astra CMG launches credit cards
JAKARTA (JP): PT Astra CMG Life and Bank Universal joined forces to launch on Tuesday a product that incorporates life insurance and credit card facilities.
Astra CMG president Steve Heald said traditional insurance and banking companies were slowly being taken over by those offering one-stop services.
"Companies selling traditional banking and insurance products will become dinosaurs in the future," he said during a media conference held in conjunction with the launch of the Astra CMG Visa card.
The card gives policyholders an identity card which also functions as a Visa credit card at Bank Universal. Cardholders will also enjoy an auto-debit facility for premium payments.
"Policyholders will no longer have to keep remembering premium payment periods because payments would be automatically debited straight from their accounts," Heald said.
Bank Universal president Stephen Z. Satyahadi said that from every transaction using the card, a reward point of 1.2 percent would be given which could be used to pay premiums.
"I think this is more beneficial to customers than giving bonuses in the form of gifts," he said.
Heald said the card was expected to attract 15,000 new customers this year, who would join the 315,000 existing policyholders.
Astra CMG recorded premium income of Rp 49 billion (US$5 million) in the first six months of 2000, and expects a total premium income of Rp 120 billion this year, compared to Rp 80 billion in 1999, Heald said.
The company paid out Rp 9.5 billion in claims between January and June of this year, compared to Rp 16 billion paid out in all of 1999.
Heald expects higher earnings thanks to the 12 new branches scheduled to open between August and September and the stronger sales force.
"In 1999 we had about a 1,350 sales force, and now it is almost 2,000," Heald said.
Astra CMG's target market is the middle to upper classes, he added. Prior to the economic crisis in 1997, the company aimed its products at the top 40 percent of income earners.
"Now our market has been reduced to the top 20 percent," Heald said, adding he was optimistic there would be a recovery by 2003.
Astra CMG currently has 33 branches in 18 cities across Indonesia. (10)