NYL bullish on RI's prospects
JAKARTA (JP): Many foreign firms are set to abandon or slash the scope of their operations here due to the economic crisis and ominous rumors, but giant U.S. insurance firm New York Life (NYL) is pledging to stay.
Top executives of the group's international arm, New York Life International (NYLI) -- chairman and CEO Gary Benanav, and president and COO Mike Nocera -- were in the capital over the weekend to reaffirm the company's confidence and long-term commitment to the nation.
"We want to confirm to the Indonesian people that we are a long-term player here," said C. Donald Carden, president director of PT Asuransi Jiwa Sewu New York Life (SNYL), NYL's Indonesian operation and flagship company in Southeast Asia.
"Whether in good times or bad times, we are here to stay."
He added that December was the best production month for the company in 1997, despite the crisis.
The company also announced it would expand on its current number of 37 branches in 17 major cities nationwide, employing 2,300 people.
"We are optimistic that SNYL will continue to grow at double digit percentage points over the next five years," Carden said. "Although things are a little hectic at the moment, in the long term, we see a very bright future for the country."
NYLI is also planning to invest more than US$1 billion in its international operations -- currently found in nine countries -- over the next few years.
The company is wholly owned by NYL, which has been in business for more than 150 years and ranks among the top three U.S. insurance firms with total assets of $80 billion.
Benanav said his firm had no banking operation but was involved in related businesses in mutual funds and securities brokerage services.
NYL would not enter into other sectors in Indonesia, he said, because its expertise was in life insurance operations.
Commitment
He stressed his visit was mainly to reaffirm the company's commitment to the country, adding that he would also meet key officials from insurance regulators.
The group has invested $140 million in Indonesian private companies' bonds. These include those issued by the pulp and paper operations of the Sinar Mas Group: PT Indah Kiat Pulp & Paper, PT Tjiwi Kimia; integrated fishing company PT Daya Guna Samudra; toll road operator PT Citra Marga Nusaphala Persada, owned by President Soeharto's eldest daughter Siti Hardiyanti Rukmana; and the Paiton power project.
"No maturity due this year," said Tatang Widjaja, an SNYL director.
Carden added that 10 percent of the firm's Rp 455 billion ($55.50 million) in investment funds was invested in the stock market, with the majority allocated in time-deposits.
"None were in the liquidated banks," he said, referring to the 16 private banks closed by the government in November last year.
Benanav also said his company had interests in acquiring other insurance firms in the country.
"We are currently looking at the marketplace for opportunities," he said.
The government has recommended that the country's insurance sectors should follow the banking sector's massive merger plans to consolidate strengths.
Under the proposal, the nation's 200 insurance firms should merge into five large operations.
"We would be one of the five," Carden said.
NYLI's local partner is the Gunung Sewu Group, which has diversified operations in property, agroindustry, banking and securities. They formed their joint venture operation six years ago.
Gunung Sewu was formerly the local partner of Hong Kong's giant investment bank, Peregrine Investments Holding, which recently filed for bankruptcy, partly due to outstanding $260 million in loans to an Indonesian taxi firm, ironically called PT Steady Safe. (08)