Crisis pushes up life insurance demand

Crisis pushes up life insurance demand

JAKARTA (JP): PT Sewu New York Life (SNYL), a life insurance
joint venture has reported robust growth in sales in the last two
months, reflecting people's increased insecurity about the
future.

Company president C. Donald Carden said yesterday the
uncertainty resulting from the country's worst-ever economic
crisis had significantly pushed up demand for life insurance
because people saw it as the best way to invest their money.

He said that the company booked a net profit of Rp 40 billion
(US$3 million) in this year's first semester, a 3,900 percent
increase compared to a measly Rp 1 billion in the corresponding
period last year.

"Regardless of the current unfavorable economic conditions,
Sewu New York Life has been able to record monthly sales of
between Rp 2.5 billion and Rp 3 billion during the first half of
this year. But in June alone we sold more than 2,000 policies
worth Rp 4 billion."

The company expects its total premium income to reach Rp 135
billion this year, slightly more than the Rp 130 billion recorded
in 1997.

SNYL, established in 1992, is 51 percent owned by New York
Life International (NYLI) and 49 percent by PT Gunung Sewu
Kencana. The company has 37 branches in 17 cities with over 1,800
agents nationwide.

NYLI's visiting president and chief operating officer, Mike
Nocera, said the Indonesian insurance industry needed a much
stronger capital base to provide security and long-term
guarantees to its policyholders.

"Without sufficient capital back-up, life insurance firms
cannot fulfill their obligations to their policyholders which
could have a negative impact on the industry," he said.

He stressed his visit to the capital was mainly to reaffirm
the company's confidence and long-term commitment to the country,
adding that he would also meet key officials from insurance
regulators. (gis)