Prudential still winning customers despite court case

Tony Hotland, Jakarta

Insurance firm PT Prudential Life Assurance says it is still able to win customers despite uncertainty over the company's status as it awaits a Supreme Court decision over an earlier bankruptcy verdict.

The firm said it had signed more than 3,000 new insurance policies between April 30 and May 31. The solvent company was declared bankrupt by the Jakarta Commercial Court on April 23 following a bonus dispute with a former agent. But after widespread criticism of the ruling, the local unit of the UK- based Prudential Plc., was allowed to reopen its offices here on April 30.

"These new policies, signed in one month, are worth Rp 29 billion (US$3.22 million). Normally, we would sign policies worth up to Rp 50 billion a month," Prudential financial controller Simon Imanto said on Friday.

The number of new applicants was significantly greater than those who were considering ending their subscriptions with Prudential.

Prudential said about 40 policy holders were considering ending their subscriptions, worth some Rp 1 billion.

"But we're still trying to hold them back. Even if they continue with their decisions, we'll try to persuade them again (not to quit) should we win our appeal," Simon said.

Prudential has appealed to the Supreme Court and is awaiting the verdict.

Simon affirmed Prudential was committed to honoring the policies of its subscribers. He said that the firm was completely supported by its UK-based parent, which had assured the firm it would shoulder all its risks and obligations.

Simon said the firm had processed all pending claims since the bankrupt declaration.

"There are eight death claims worth Rp 1.6 billion, and around 400 other kinds of claims worth Rp 2.2 billion. We've processed all of them," he said.

A Prudential agency manager T.J. Timotius said all the firm's agents had been completely open with existing and new policy holders about the situation.

"We tell them, but we managed to convince them that we're financially sound and what happened was because of a flaw in (Indonesia's) legal system," he said.

Prudential was declared bankrupt following a law suit by a former Prudential agent who accused the firm of a failure to pay him bonuses and demanded compensation of about Rp 366 billion.

The firm enjoyed a handsome profit last year, with its total premium income reaching Rp 1 trillion, compared to Rp 477 billion in 2002.

"Prudential is no doubt a financially solid company. We look forward to a fair and objective decision by the Supreme Court that would allow us to continue to grow here," Prudential president director Charlie Oropeza said in a statement.