INSURANCE COMPANIES OPTIMISTIC TO GROW BY 20 PCT

Surabaya, Mar 27 (ANTARA) - Insurance companies in East Java were optimistic they will grow by 20 percent this year, but to achieve this they would have to increase the number of their agents and choose alliances to survive in the current global economic crisis.

"Alliances would increase their additional fee based income," President Director of PT AJ Mega Life, Oemin Handajanto, said here Thursday.
As an example he said that in these days, the activities of alliances which had been fostered are bank assurance, which is an insurance product through a bundling program with various kinds of banking products.
"This is quite effective, because there is no need for the customers to take care of savings and protection," he said.
But with regard to the link unit, which last year revived, including those offered through banks, he said it has yet to be restored.
"The growth of the link unit has yet to be as big as last year's 90 percent of the total products sold. This year insurance will dominate purely protection sales," he said.
He added that actually insurance companies are not too worried about their link products, because the majority of insurance industry portfolios which are moslty in shares are sitll limited.
"They prefer investment in long-term bonds like state bonds and ordinary bonds, according to the characteristics of long-term insurance industry," he said.
On the other hand, he added, insurance companies could develop cooperation with shopping center operators and telecommunication operators. This cooperation may be in the form of marketing or securing new customers.
"Besides, it could also be done under insurance free shopping package programs and reward points for cell phone customers which can be exchanged with insurance," he said.
In the meantime, President Director of PT Asuransi Adira Dinamika (Adira Insurance), Willy Suwandi Dharma, preferred a moderate and conservative target, in view of the still unstable economic situation.
"This year we have projected a 5 percent increase. This is quite reasonable in the current economic situation. And last year we managed to book a premium income of Rp700 billion, or a growth of 20 percent, compared to the 2007 performance," he said.
Caused by the impact of the current global economic crisis, he said, this year Adira will still not expand its business by opening new branch offices but by issuing new products to reach the projected premium growth. He will also start recruiting new agents for stronger product penetration.
"Product marketing by banking insurance would be effective to reach more customers. In the first quarter of 2009, Adira's premium income was relatively good, reaching Rp100 billion," he said.