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)