Reissurance profits and premiums rose by 2 digits

JAKARTA. Reissurance companies expect to increase the premiums and profits in this year.

PT Indonesia Re revealed, last year, the stand alone premium of the company amounted to Rp 4.7 trillion, with the consolidation premium of Rp 5.2 trillion. Indonesia Re expects to reap consolidation premium as much as Rp 7 trillion in this year.

The President Director of Indonesia Re Frans Y. Sahusilawane also expects to rise the earning before interest and tax by 39% to Rp 500 billion by the end of 2017. The EBIT of the company has grown to Rp 360 billion from the last year.

In order to boost the profits, Indonesia Re expects to obtain a gross return on investment (ROI) of 8% in this year. To date, the total investments of Indonesia Re amounted to Rp 3,6 trillion. Most of the portfolio, about more than 50% and 20% of the portfolio will be allocated to the deposits and the government bonds (SBN), respectively, while others will be allocated to the stock-based multi funds.

Acquiring corporate bonds

Indonesia Re accumulates government’s bonds and mutual funds in daily basis. The company also acquires corporate bonds with the average value of Rp 50 billion. Indonesia Re prefers to acquire the bonds of the infrastructure state owned enterprises (SOEs). Recently, Indonesia Re has just acquired PT Waskita Karya Tbk’s bonds worth Rop 20 billion. According to Frans, the criteria to select the investment instruments are ‘safe’ and ‘sufficient to meet the company’s yields target.

Meanwhile, PT Reasuransi Nasional Indonesia (Nasre) is targeting to increase the premium by double-digit or 29.17%. The Financial Director of Nasre Rusdianto said, the company expects to increase the realization of the gross premiums from Rp 4.8 trillion in 2016 to Rp 6.2 trillion in this year.

In terms of profits, Nasre expects to grow the profits by 34.6% from Rp 335 billion to Rp 452 billion.

Aside of increasing the premiums, Nasre will also rearrange the investment portfolio to reach a larger ROI. Last year, the ROI of Nasre reached the level of 6.5%. According to Rusdianto, the ROI was generated from the investment yields as much as Rp 155 billion from the total investments of Rp 2.5 trillion.

This year, Nasre expects for the investment yields of Rp 277 billion or equal with the ROI of 8%. In order to meet the target, Nasre will allocate 45%, 20%, and minimum 20% of its investments to deposits, multi funds, and SBN. The rests will be allocated to invest in stocks and corporate bonds. Nasre prefers to collect blue chip shares and the bonds with the minimum rank of ‘A’.

PT Tugu Reasuransi Indonesia (Tugu Re) is projecting to grow the premiums by 24% to Rp 3.1 trillion. The Financial Director of Tugu Re Dradjat Irwansyah said, the net profits are expected to grow by 14% from Rp 192.7 billion to Rp 219.5 billion. (Muhammad Farid/Translator)