Allianz Indonesia Sees Growth in Premiums
With what it cited as an increasing awareness of life and property protections in Indonesia, Allianz S.E. [85449] recorded strong premium gains in the Indonesian market.
The Germany-based insurer reported total gross written premiums of 3.7 trillion Indonesian rupiahs (US$308 million) generated from its life and nonlife sectors together in 2008, representing growth of 8.8% from 3.4 trillion rupiahs in 2007.
Allianz Indonesia said it has set “an optimistic target” of increasing gross premiums and more than doubling its growth rate to 18.9%, with a target of 4.4 trillion rupiahs in premiums for 2009. The company also aims to expand its agency staff to more than 16,000 by the end of the year.
Jens Reisch, president director of Allianz Life Indonesia, said Allianz Indonesia has grown profitably in 2008. “Our strong solvency ratio of 306 for Allianz Life, which is far above the government minimum regulation of 120, and 162 for our nonlife unit Allianz Utama — as well as our robust profits, with 128.8 billion rupiahs generated from life business and 43.8 billion rupiahs from nonlife business — prove that we are a financially solid and stable partner for our customers,” he said.
Reisch also said the insurance group is in a “very good position” to provide long-term protection to all of its customers in tough economic times.
The Life Sector
In 2008, Allianz Life Indonesia recorded premium income of 2.9 trillion rupiahs, up 7.4% from 2.7 trillion rupiahs in 2007. Of that, individual life business accounted for 60% of total gross premiums, while group life insurance, including severance plans, and health insurance respectively accounted for 30% and 10% of the total.
According to the life unit, all of its business showed higher premium growth, but the high rate of single premiums in individual life from 2007 did not repeat in 2008.
The corporate life business, which includes group life insurance and severance plans, grew nearly 500% to 868 billion rupiahs of gross premiums, mainly due to the growth in the credit life business from the group’s various banking partners. The health insurance business contributed 288 billion rupiahs of gross premiums.
During the year, Allianz Life Indonesia’s individual life business generated 829 billion rupiahs premiums from regular premium business, up 46% from 566 billion rupiahs in 2007.
The life unit said that “the uncertainty in the investment markets, especially in the last four months in 2008” hurt its single-premium unit-linked business and pulled it down to 911 billion rupiahs from 1.8 trillion rupiahs in 2007.
For the business portfolio, about 60% of the company’s individual life business was generated through the agency channel, while 40% came from its bancassurance partnerships. In addition, more than 99% of the insurer’s new individual life business is generated from unit-linked policies.
Reisch added that in 2008, Allianz Life Indonesia’s new business annualized premiums generated from its agency channel rose 41% to 294 billion rupiahs.
During the year, assets under management of Allianz Life Indonesia were reported at 5.6 trillion rupiahs, of which, around 2.9 trillion rupiahs were generated from the insurer’s unit-linked business.
The Nonlife Sector
In the general insurance business, Allianz Utama Indonesia recorded gross premiums of 776 billion rupiahs in 2008, up 15% from 2007, mainly due to strong growth in the motor business.
According to the nonlife unit, property insurance and motor vehicle insurance respectively accounted for 36% and 30% of its total premiums, while the rest of its portfolio were from engineering insurance, casualty insurance and marine insurance, which respectively accounted for 14%, 12% and 7% of the total premiums.
Volker Miss, president director of Allianz Utama, said the company’s motor insurance business was its “key premium driver with a 20% increase on a year-on-year basis.” He said the nonlife unit’s cooperation and partnerships with banks and financial institutions were “very supportive” during the year.
Although Allianz Utama experienced “a number of bigger claims in the corporate and small- and-medium-sized enterprises sector,” Miss said the company still generated a positive profit and maintained a strong solvency ratio with “its business growth, underwriting discipline and proper reinsurance setup” in 2008.
He said the insurance group is now facing “more and more demanding environments in Indonesia’s general insurance industry, but it is still well on track and has met its premium targets for 2008.”
During the year, Allianz Utama Indonesia said its assets under management rose by 26% to 801 billion rupiahs, while its total policies issued amounted to 137,000 compared to 106,000 in 2007.
The German insurance group said the Indonesian life and nonlife units together are insuring more than 1 million customers and are supported by more than 12,000 agents nationwide.
Forecast for 2009
According to Allianz Indonesia, the insurance group comprising PT Asuransi Allianz Life Indonesia and PT Asuransi Allianz Utama Indonesia has set a target of generating 4.4 billion rupiahs of gross premiums in 2009. Both insurance units will further strengthen and align their sales and service capabilities and networks and establish more Allianz Centers in 2009, complementing the existing four financial services centers in Jakarta, Bandung, Surabaya and Denpasar that were established in 2008.
—Rebecca Ng
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