Tugu Pratama 'keeps grip' on oil sector

JAKARTA (JP): Most local insurance companies are still unable to break the stranglehold of PT Tugu Pratama in coverage for the oil sector despite state-owned oil company Pertamina's recent commitment to equal opportunities, a leading executive said on Tuesday.

President of state-owned PT Asuransi Jasa Indonesia (Jasindo) Amir Imam Poero said Tugu Pratama continued to dominate insurance coverage in oil and related industries.

He said he did not know why the firm was still allowed to control the sector, which contributes 70 percent of the country's total indemnity insurance market.

Speaking at a hearing with House Commission VIII for Finance and Trade, Amir said the exclusive rights given to Tugu Pratama hurt other insurance companies because they had to compete for the remaining 30 percent of the indemnity insurance pie.

Tugu Pratama also controlled 16 percent of the 30 percent, Jasindo 12 percent, PT Asuransi Berdikari 2.6 percent, PT Sinar Mas contains 3.8 percent and PT Astra Buana 2.8 percent.

State oil and gas company Pertamina earlier said it would not renew its insurance contracts with Tugu Pratama in its commitment to rid its business of corruption, collusion and nepotism.

Pertamina's president Soegianto said all the maturing insurance deals with Tugu Pratama, which at present underwrites all Pertamina's insurance contracts, would not be extended.

Tugu Pratama Indonesia, established in 1981, is 35 percent owned by PT Nusantara Ampera Bhakti (Nusamba), which is headed by former president Soeharto's close associate Mohamad "Bob" Hasan. Pertamina owns 45 percent of the company, with the remaining 20 percent held by Pertamina's pension fund.

Amir said Jasindo had Rp 18 billion (US$2.4 million) of the total claim of Rp 53 billion from owners of property burned and damaged during massive riots in May.

He said the remaining Rp 35 billion of the total claim would soon be settled by reinsurance companies.

Amir estimated Jasindo's total claim payment would surge to Rp 419.79 billion in 1998 from Rp 213.50 billion last year.

He attributed the sharp increase in the payment claims to the crashes of Garuda Indonesia's two aircraft in Fukuoka, Japan, and Medan and the May riots.

"Moreover, we have also had to pay claims from state-owned company PT Pelni whose two ships were stranded in China," he added.

Amir said the rise in the claim payment would cut profit to Rp 42.80 billion this year from Rp 45.959 billion last year. (29)