Insurance firm's paid up capital reaches Rp 12.1b

Insurance firm's paid up capital reaches Rp 12.1b

JAKARTA (JP): PT Asuransi Astra Buana, a subsidiary of the publicly listed PT Astra International, yesterday announced an increase of Rp 6 billion (US$2.7 million) in its paid up capital to a total of Rp 12.1 billion.

Willy Suwandi Dharma, president director of Asuransi Astra Buana which is commonly known as Astra Insurance, said that the additional capital was designed to enlarge the company's risk acceptance capacity and strengthen the company's capital structure.

"We expect that the shareholders' equity will approach Rp 25 billion by the end of 1995," Willy said.

He added that the company's retained earnings at the end of last year reached Rp 7.8 billion, thereby increasing its total capital to Rp 19.9 billion.

Last year, the company booked a gross premium of Rp 67.9 billion, up 73 percent from the previous year. This year, Willy said, the company is projected to collect some Rp 95 billion in gross premium.

Sophar Lombantoruan, Director of Insurance at the Directorate General of Financial Institution of the Ministry of Finance, said additional capital at Astra Insurance and other local insurance companies is essential to increase the national retention capacity of Indonesia's insurance industry.

"Capital is an important element to achieve a healthy, strong and reliable insurance industry in Indonesia. Therefore, the government has always urged insurance companies to strengthen their capital bases. Otherwise, they would be edged out of the market by strong international insurance companies," Sophar said.

He noted that Astra's Rp 12.1 billion of paid up capital is actually small compared to international insurance companies, which have been allowed to enter Indonesia.

In comparison, joint-venture insurance companies have an initial paid up capital of Rp 15 billion. (rid)