Jasa Raharja's profit rebounds

Jasa Raharja's profit rebounds

JAKARTA (JP): State-owned life insurance company PT Jasa Raharja's before-tax profit, which declined by nearly 35 percent to Rp 37.12 billion (US$16 million) in 1994, rose 47 percent to Rp 54.81 billion (US$23.9 million) last year.

The company's president, Ida Bagus Putu Sarga, yesterday attributed the impressive increase in last year's profit to the significant growth in the company's income from premium revenues.

The premium revenues of Jasa Raharja, a state-owned insurance firm specially assigned by the government to cover traffic accidents, rose by 11 percent last year to Rp 210.90 billion after a 22 percent decline in 1994.

"The revenues from investments have yet to contribute much to the profits. The rate of return is still low," Putu told a hearing of the House of Representative's Commission VII, for finance and trade.

The total value of Jasa Raharja's investments was Rp 168.45 billion in 1995, as compared to Rp 135.37 billion in 1994, Rp 155.21 billion in 1993 and Rp 148.82 billion in 1992.

Putu said that Rp 120.71 billion or 70 percent of the total investments made in 1995 was put in long-term investment activities.

Putu said that 69 percent of the total investment funds are now placed in banking deposits, 3 percent in listed shares, 14 percent in bonds and the remaining 14 percent in direct equity participation.

Jasa Raharja's average rate of return on investments is around 13 percent per annum, slightly higher than the average of 10.75 percent recorded by state-owned and private insurance companies.

Putu told the commission that the growth rate of revenues from investments showed a decline in the last five years, which was not in line with the sharp increase in the fresh investment funds, he said.

"That's why we need additional investment funds of around Rp 1.2 trillion to break even in investment activities," he said. (hen)