Cigna expects bullish demand in local insurance market

JAKARTA (JP): Insurance firm PT Asuransi Cigna, formerly known as PT Asuransi Niaga Cigna Life, expects a significant increase in its life assurance business this year despite the bleak outlook for the country's economy.

Company finance director David Batubara said on Wednesday that the company's revenue was projected to increase by 35 percent to Rp 92 billion (about US$8.4 million) in 2001 from Rp 68 billion in 2000.

He attributed the projected increase in revenue to a significant rise in the number of new individual policy holders.

"We're quite optimistic of reaching the target although we only recorded a 13 percent increase in revenue during the first quarter," he said.

He said that the low increase in revenue between January and March was more due to the market having reached a cyclical low point during the period.

"The curve usually goes that way," he said.

Cigna, an affiliate of Philadelphia-based insurance company Cigna International, officially changed its name last week as part of its corporate image enhancement.

At the present time, Cigna International controls 80 percent of the insurance firm's shares after acquiring 20 percent of Bank Niaga's share in the firm in December last year.

The remaining 20 percent of the shares are still owned by Bank Niaga.

Cigna started its operation in Indonesia in 1994 through a joint venture with Bank Niaga.

Many local companies have expressed worries about their business prospects due to the country's political uncertainties and the overall economic outlook.

Analysts have said it would be difficult for Indonesia to meet its 4% economic growth target given such unfavorable conditions. They are also worried that the economic slowdown in major countries, particularly the United States and Japan, will deal a major blow to the country's economy.

David said he was upbeat that the number of policy holders would grow by 15 percent this year from about 28,000 in 2000 despite the gloomy outlook.

The company's marketing director Raeshita Suardi said that Cigna, which offers around 56 life, health and personal accident products, would continue its strategic alliance with Bank Niaga by supplying Bank Niaga's customers with its Bancassurance life products.

Besides Bank Niaga, Cigna also supplies other corporate customers including Dinners Club, Standard Chartered, GE Capital and Bank BNI, she added.

Currently, the firm has branches in Jakarta, Bandung, and Surabaya. It has also opened representative offices in Yogya, Semarang, Malang, Medan, Bali and Makassar. (05)