Astra CMG launches credit cards

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)