Marein expects 22.7% rise in premium income

JAKARTA (JP): Publicly listed reassurance company PT Maskapai Reasuransi Indonesia (Marein) expects a significant increase in its reassurance business despite the bleak outlook in the nonlife insurance service.

Marein president R.A.Wuwungan said on Thursday that the company predicted an increase of 22 percent in premium income to Rp 115 billion (US$10.17 million) this year from last year's Rp 93.70 billion.

"We are optimistic of reaching the target as in the three- month period this year, the company has already booked Rp 16.75 billion, or a 58.75 percent increase compared to the same period in 1999," Wuwungan said.

Wuwungan said the increase in premium income would come largely from the growing portfolios in the life reassurance business.

"The trend shows nonlife reassurance business is declining, while life reassurance industry remains relatively stable despite the country's economic difficulties," Wuwungan said in a media conference.

The nonlife reassurance include fire reassurance, marine hull reassurance, cargo reassurance and accidents.

Citing the company's 2000 financial report, Wuwungan said the premium income share from nonlife reassurance dropped to 54.3 percent from 60 percent in the previous year, while that from the life reassurance sector surged to 45.39 percent, compared to 39.89 percent in the previous year, he said.

"The greatest plunge in the company's overall premium income is from the fire reassurance sector, which dropped to 25.27 percent last year from 39.13 percent in 1999," he said.

Such a gloomy outlook in the nonlife reassurance business prompted the company to change its focus to life reassurance business, Wuwungan said.

"We are hoping to boost the share of the premium income from life reassurance industry to 70 percent within five years," he said.

Last year, the company's total premium income surged by 39.47 percent to Rp 93.71 billion from Rp 67.18 billion in the previous year.

The company also recorded a growth of 13.49 percent on income from investment to Rp 5.01 billion last year, as compared to Rp 4.41 billion in 1999.

Wuwungan, however, said that despite significant increase in earnings, the company's net profit fell sharply to only Rp 664 million last year from Rp 2.78 billion in 1999.

"The sharp decline is due to payment of deferred income tax of previous years which accumulatively reached Rp 1.35 billion last year," he explained. (03)