Life insurance companies book solid growth
Life insurance companies book solid growth
JAKARTA (JP): Most local insurance companies reported a solid
growth in premium incomes in the last two years due to a
significant growth in the number of new policyholders.
Angger P. Yuwono, the vice president of Asuransi AIA
Indonesia, said the demand for life insurance continued to grow
despite a drastic drop in early 1998 during which many
policyholders discontinued their contracts.
He said he was quite sure the bullish demand would continue to
expand in coming years with an improvement in people's awareness
about the importance of life insurance in their lives.
About Rp 2.83 billion worth of policies of 36 major life
insurance companies were surrendered in 1998 as policyholders,
due to the crisis, could no longer afford to pay insurance
premiums, according to data provided by the Association of
Indonesian Insurance Companies.
Angger said policy surrenders, which mostly took place in
early 1998, declined sharply this year.
He said in the first half of this year alone, the new premium
income (premium from new policyholders) of the 36 insurance
companies reached a total of Rp 1.16 billion, almost equivalent
to the Rp 1.55 billion recorded in the whole of 1998.
"The total of new premium income this year is expected to
increase by 50 percent from the 1998 level," he said.
There are about 60 life insurance companies, half of which are
multinational and joint venture firms, and some 110 general
insurance companies operating in Indonesia.
Hans Martin Graf, president of Zurich Insurance Indonesia,
said the life insurance demand, which was interuppted by the
sharp increase in policy surrenders in early 1998, continued to
show a healthy performance.
The economic crisis, which began to hit the country from late
1997, was followed by a series of violent incidents and this told
people how important life insurance packages are for protecting
lives, he said.
Laurence Warburton, the president of Asuransi Allianz Life
Indonesia, said many people also switched to insurance for
investment.
"They don't have the same confidence in banks as they used to.
So a lot of people are now looking for other possibilities, in
particular, they are looking at life insurance," he said.
He said Allianz saw dynamic growth over the years.
The company secured about Rp 7.02 billion in new premium
incomes in 1996, Rp 9.66 billion in 1997 and Rp 19.34 billion in
1998. Allianz had booked Rp 19.16 billion in new business as of
August.
C. Donald Carden, the president of Asuransi Jiwa Sewu New York
Life, said the company had booked a triple-digit growth during
the first four years of operation.
He said Indonesia was a very lucrative market and was not
optimally tapped.
"The penetration here is so low. This is a very easy market to
sell, much easier than the U.S. because the demand here is
stronger. In the U.S., everybody already has something, but here
many just have no policy at all," he added.
Zurich's Graf said many people still needed a better insurance
product and they should be careful to choose the best insurance
package and insurance company.
"As a consumer, you should have the feeling that someone is
listening and you are being understood ... So if a person pushes
you by saying this is what I have to give you, then he does not
understand you at all." (cst)