Jasindo aims to boost retail market revenue

JAKARTA (JP): State-owned general insurance firm PT Asuransi Jasa Indonesia (Jasindo) said on Wednesday that it would raise its retail-driven revenue to 20 percent from last year's 8 percent.

Jasindo spokesman Reni Rizal said the target was part of the company's strategy to focus more on its retail market.

"We began to realize the huge potentials of the retail market," Reni said at a press meeting.

She said Jasindo currently owned four retail insurance products, comprising travel, accidents, car and home insurances.

At present, the company is better known in a corporate insurance market, with a strong clientele base of state-owned companies.

She said 92 percent of the company's 1999 revenue of Rp 212 billion (US$24 million at the current rate), derived from its corporate insurance market.

"For this year, the composition will be 80 percent corporate and 20 percent retail," she said.

Jasindo, in an article from the company's bulletin, expected this year to earn Rp 102 billion from its retail market and Rp 508 billion from its corporate market.

Reni said Jasindo was actually among the first companies to introduce retail insurance, when it launched its car insurance product during the 1980s.

"However, back then we found the corporate market to be more profitable," she explained.

Last year, she said, the company began to sell travel- insurance coupons at airports covering domestic routes. "Despite the smaller premium, we expect a significant revenue from these insurance coupons."

Reni said that the company was also preparing its human resources to expand the retail market through direct selling and promotion activities.

She expressed confidence that Jasindo would gain a sizable share of the retail market segment, saying that premium payments were relatively cheaper compared to its competition.

Jasindo's director of corporate operation, Mustafa Ashari, in an interview with the company's bulletin in March, said that the 1997 economic crisis had prompted Jasindo to strengthen its retail market.

Mustafa said that by expanding its retail market, Jasindo would become less vulnerable to slumps in the corporate market, as happened during the economic crisis.

"This is why we need to balance our portfolio with smaller revenue bases, by changing the composition of the policy holders," he was quoted as saying.

He said the shift in Jasindo's insurance portfolio would follow a restructuring of its organization.

"We'll look for people that fit with the retail sector, as both the service and the marketing are different from the corporate sector," the bulletin quoted him saying.

However, he added, Jasindo's core business remained in the corporate insurance market.

Jasindo said it has 30 years of corporate insurance experience with clients, including state-owned telecommunications firm PT Telkom Indonesia, national airline Garuda Indonesia and steel company PT Krakatau Steel.

The company reported its net income in 1999 was Rp 57 billion from Rp 52 billion in 1998.

Its total assets last year stood at Rp 746 billion from Rp 733 billion in 1998, the company said.(bkm)