PT Marein forecasts 20 percent profit rise

PT Marein forecasts 20 percent profit rise

JAKARTA (JP): Publicly listed reinsurance firm PT Maskapai
Reasuransi Indonesia (Marein) expects a 20 percent growth in net
profit to more than Rp 3 billion (US$1.23 million) this year from
Rp 2.54 billion last year.

Last year's net profit was up 23.19 percent from 1995's 2.06
billion.

Marein's president, R.A. Wuwungan, said yesterday the company
would realize the profit rise by shifting its business
orientation from fire reinsurance to life insurance.

"We will concentrate on life reinsurance because it is more
stable, the loss ratio does not fluctuate much, and we can
project the outcome," Wuwungan said after the company's annual
shareholder meeting and extraordinary meeting.

The tight competition in the fire insurance business had
caused a price war and a decline in premium income from this
sector, he said.

Although the Insurance Council of Indonesia reduced the fire
insurance premium rate by over 50 percent last year, it was still
40 percent higher than premium rates in other insurance sectors.

Fire insurance premiums will be cut by another 40 percent next
month, he said.

Wuwungan said fire reinsurance premiums contributed 48.8
percent of Marein's gross premium income last year, life
insurance 30.7 percent, marine hull and miscellaneous 11.1
percent and cargo 9.4 percent.

"This year we expect to raise our life reinsurance business
income to 40 percent," he said.

He said he hoped life reinsurance would contribute about 50
percent of its total premium income by next year.

The company's gross premium income rose 7 percent from Rp
53.60 billion in 1995 to Rp 57.39 billion last year.

Wuwungan said last year's premium income was slightly lower
than initial projections because of growing competition from
foreign companies.

The company's underwriting income rose from Rp 3.66 billion to
Rp 5.07 billion and its investment income increased from Rp 2.58
billion to Rp 3.04 billion.

At yesterday meeting shareholders approved a Rp 98 dividend
for 1996.

Shareholders also approved raising the company's paid-up
capital from Rp 30 billion to Rp 70 billion and cutting each
share's nominal value from Rp 1,000 to Rp 500.

Marein shares were steady at Rp 1,800. (das)