The economic upswing has positively boosted the performance of PT Asuransi Allianz Utama Indonesia (Allianz Utama) and PT Asuransi Allianz Life Indonesia (Allianz Life) during the first half 2010. Both companies recorded a combined total local profit (unaudited) of IDR 248 billion, an increase of 117,5 percent compared to the first semester 2009 figure of IDR 114 billion.
Both companies also reported strong growth in total assets, which grew significantly to IDR 10.1 trillion. Solvency ratios were confirmed at the secure level of 487 percent (Allianz Life) and 142 percent (Allianz Utama), far above the government minimum requirement of 120 percent.
“Both of Allianz companies in Indonesia understand that we need to maintain our stable financial performance and focus for creating service innovations to keep our customers’ trust. Supported by Allianz Group’s financial strength and favorable international ratings also reinsurance back up, we are able to consistently deliver our promises to our customers in their most important moments,” said Handojo Kusuma, Deputy CEO of Allianz Life Indonesia.
General insurance business
Aligned with the management strategy to improve business portfolio by implementing more prudent underwriting practices, Allianz Utama generated IDR 377 billion of Gross Written Premium (GWP) during the first half of 2010, lower compared to the same period last year of IDR 517 billion.
“We gained a very positive result from our stricter underwriting practices in this first semester. Despite a lower GWP, our profit before tax has grown significantly by 233.3 percent to IDR 30 billion compared to last year’s first semester profit before tax of IDR 9 billion. This means that our efforts have started to make positive outcome” said Victor Sandjaja, Deputy CEO of Allianz Utama Indonesia.
Allianz Utama’s GWP performance was mainly generated from property insurance (39 percent) and engineering insurance (19 percent), while the rest of the portfolio was generated from motor vehicle insurance (17 percent), casualty insurance (16 percent) and marine insurance (10 percent).
This healthier underwriting condition also supported by positive investment performance during the first half of 2010. Investment income was reported strong at IDR 37.7 billion, grew by 12.5 percent compared to last years’ IDR 33.5 billion.
Furthermore, claims paid by the company during the first half of have decreased by nearly 35 percent year on year, from IDR 280.6 billion to IDR 181 billion.
Prudent underwriting practices also significantly increased the company’s solvency ratio to 142 percent. In the same period last year, Allianz Utama was only reported 125 percent solvency ratio.
Allianz Utama continues to enlarge its agency contribution in the overall distribution portfolio, especially for retail business. Currently, agency business contributed 22 percent of the total GWP. By customers segment, 80 percent of the GWP were gained from corporate customers, 15 percent came from retail and 5 percent from small and medium enterprise customers.
“Our most prominent distribution is still the broker channel, which contributed nearly 60 percent of our total GWP. However, we will focus on developing our agency channel in the near future to boost the retail business, which we believe as more stable,” Victor added.
Life, Health and Group businesses
In Life, Health and Group insurance business, Allianz Life Indonesia reported nearly IDR 2.12 trillion of GWP compared to IDR 1.06 trillion in the first half 2010.
Individual Life insurance business reported a GWP income of IDR 1.43 trillion compared to IDR 746.2 billion in the same period last year. The recovery of investment and macroeconomic conditions have improved the sales of single premium products from IDR 49.58 billion, to IDR 532 billion or grew by 975 percent. On the other side, premium income from regular premium business rose significantly by 28.4 percent, to IDR 894.43 billion compared to the first half 2009 of IDR 696.65 billion.
"We are very happy with this very good result. With more regular premium income, our long term business portfolio will become healthier. It also shows that Indonesian people is more aware to make insurance as part of their long-term financial plan," said Handojo.
Both group and health insurance businesses reported strong GWP incomes. Group business generated IDR 537.59 billion GWP, compared to IDR 171.4 billion in last year’s first semester.
Health insurance GWP was reported at IDR 154.7 billion, or grew 6 percent from last year’s first semester of IDR 145.7 billion.
Allianz Life Indonesia reported a strong growth of 108 percent of its local profit before tax to IDR 218 billion, compared to IDR 105 billion in the first semester last year. Its invested assets also grew by 47 percent, reaching IDR 9.58 trillion, while the solvency ratio stood at a significant 487 percent.
A solid condition of Indonesia’s economic fundamentals has also led to a very favorable investment performance in this first semester. Allianz Life Indonesia reported investment income of IDR 202.43 billion, an increase by 248 percent from the same period last year of IDR 58.22 billion.
“Our strong and solid financial performance secures Allianz Indonesia’s position as the best partners for our customers and business partners,” said Handojo.