Tugu Pratama 'keeps grip' on oil sector

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)