Life insurers report 33.5% growth in their revenues

JAKARTA (JP): The Indonesian Insurance Council (DAI) yesterday reported a 33.5 percent increase in revenues from the life insurance sector, rising to Rp 1.28 trillion (US$592.21 million) last year from Rp 963.15 billion in 1992.

"Of last year's total revenues, Rp 1.04 trillion came from life insurance premiums," DAI's vice chairman for life insurance affairs, Sujono Soepeno, told reporters here yesterday.

He said that last year's premium revenues reflected a 36.3 percent increase from Rp 766.98 billion in 1992.

Sujono revealed the information at the launching of DAI's 1993 report on the country's life insurance industry, held at the Le Meridien Hotel.

Based on the report, PT Bumiputera 1912, Jiwasraya and Dharmala Manulife were the biggest premium earners last year with their revenues reaching Rp 416.40 billion, Rp 166.82 billion and Rp 74.94 billion, respectively, he said.

Sujono, who is also the president of PT Panin Life, said that life insurers' revenues from investments increased to Rp 200.63 billion last year from Rp 182.34 billion a year earlier.

Jiwasraya last year recorded the highest revenues in the insurance sector with Rp 67.44 billion, followed by Panin Life with Rp 35.38 billion and Bumiputera 1912 with Rp 31.83 billion, he added.

He pointed out that the fine performance of life insurance revenues was partly due to the increase in the number of policy holders in the country.

He noted that the number of life insurance policy holders last year increased to 14.94 million insured for Rp 31.64 trillion, from 13.52 million with Rp 26.10 trillion in 1992.

He said that policy holders as a percentage of the country's population increased to eight percent last year from 7.3 percent in 1992.

An informed source told The Jakarta Post recently that the insurance policy holders as a percentage of the population was 35 percent in Singapore, 40 percent in the Philippines, 20 percent in Malaysia and 30 percent in Thailand.

Penetration

Sujono said that in terms of insurance penetration, which is a statistic expressing premiums as a percentage of the gross domestic product (GDP), premium payments in Indonesia reached only 0.4 percent last year, as compared to 9.8 percent in South Korea, 6.3 percent in Japan, 2.3 percent in Singapore, 1.7 percent in Malaysia and 1.4 percent in the Philippines.

However, he said that he was optimistic that the Indonesian life insurance industry had a bright future due to the increasing number of policy holders.

Sophar L. Toruan, director of the insurance industry of the Ministry of Finance, attended yesterday's launching ceremony and expressed his optimism that the number of premium holders would rise by 20 percent in Indonesia in the coming years. He said his estimate was based on the fact that there are still around 35 million workers in the country who were not covered by insurance.

However, he also said that the lack of professionalism in managing the insurance industry was the main problem faced by the country's insurers.

"Some insurers, for example, still take two or three months before paying insurance claims. This will discourage policy holders," he said.

Sophar said there are now 148 insurance companies in the country, comprising of 46 life insurance firms, 98 loss insurers and four reinsurers. (fhp)