Political concerns push up demand for life insurance
Political concerns push up demand for life insurance
JAKARTA (JP): The demand for life insurance significantly
increased during the last two months as people feel more insecure
about their future, an insurer said yesterday.
David W. Cottrell, the president of joint venture life
insurance PT Asuransi Jiwa Bumiputera John Hancock said unrest,
riots and anti-government demonstrations in the past several
months, combined with the country's economic crisis, caused
financial and political uncertainty.
Such uncertainties prompted the people to seek financial
alternatives to protect their future and life insurance coverage
has become one of the best choices, he told journalists at the
launching of the company's new life insurance product.
"The people fear that anything bad can happen to them in the
current unstable political and social environment. It makes them
want to save something for their loved ones as a safeguard if
something bad happens to them," he said.
The company's sales and marketing director Robert A. Wannee
said the company netted about 200 new policyholders monthly since
May when riots, looting and arson hit Jakarta and several other
cities.
The massive riots, which led to the resignation of President
Soeharto, left hundreds of people dead, mostly trapped in burned
shopping centers and malls in Jakarta.
He said before May the number of new policyholders was about
100 per month.
"This month, the premium income is expected to reach US$300
million, compared to merely $130 million in the same month last
year," he said.
He added that other life insurance companies were also
experiencing the same trend.
Bumiputera John Hancock, established in 1987, is 20 percent
owned by PT Asuransi Jiwa Bersama Bumiputera 1912, Indonesia's
oldest life insurer and 80 percent by U.S based John Hancock
Mutual Life Insurance Company, a giant life insurance company
with over $110 billion assets.
The company launched a new product called Garuda (Your Family
Guard) which combines investment and insurance with protection
from inflation.
Cottrell said the new product is particularly designed for
Indonesian families who need a financial plan that addresses the
current uncertain economic conditions and prepares them for a
financially sound and stable future.
"Garuda policyholders are protected from currency depreciation
and inflation. Besides, they do not have to pay regular premiums
to be protected; in fact, Garuda can work well with only one
initial investment," Cottrell said.
He said that the company targeted sales of 500 policies per
month by the end of this year. At least 10 percent of these are
expected to be the Garuda product. (gis)