Sewu New York Life pays out Rp 303 billion
Sewu New York Life pays out Rp 303 billion
JAKARTA (JP): Joint venture life insurer PT Asuransi Jiwa Sewu
New York Life said on Thursday it spent Rp 303 billion (US$34.4
million) in 1998 to compensate surrendered U.S. dollar-
denominated policies.
The company's president Donald Carden said many dollar-
denominated policy holders could not continue to pay their
premium due to the sharp depreciation of the rupiah against the
greenback.
"We had to pay out Rp 303 billion in 1998 to our policy
holders who surrendered U.S. dollar-denominated policies because
they could not continue to pay their premium due to the
significant rupiah depreciation," he told a press briefing.
Carden said the company paid those policy holders at the
prevailing dollar-rupiah exchange rate -- even when it was Rp
15,000.
However, he said, the company hedged all its dollar
obligations with dollar deposits at sound local banks.
"Our record of paying our policy holders at a fair market
exchange rate has attracted more clients wanting to invest with
the company," he said.
The big inflow of new clients in 1998, Carden said, boosted
the company's revenue to Rp 172 billion, a 45 percent growth from
the previous year -- the highest increase ever booked by the
company.
"We made a 45 percent revenue increase in 1998. I think life
policy holders tend to be more careful and have switched their
insurance to a financially stronger firm." Carden said.
The company, however, did not reveal its operating costs nor
its net profit for 1998.
Sewu New York Life is a joint venture between New York Life
International of the United States and PT Gunung Sewu Kencana.
The joint-venture operates 45 branches in 19 cities
nationwide.
Donald said he was optimistic about the outlook of the
domestic insurance industry in 1999.
"Indonesia is moving towards a more stable political
condition. Whatever the result of the June election, the people
of Indonesia have to live with it. And the economy will have to
return to normal," he said.
Total domestic life insurance premiums expanded by 25 percent
to Rp 3.5 trillion in 1997, according to the directorate of
insurance at the Ministry of Finance. The 1998 figure is not
available yet. (02)