Unitlink is major driver for Allianz, Prudential

JAKARTA. Insurance firms Allianz Life Indonesia and Prudential Life Assurance showed strong performances last year, with each firm recording double-digit growth in their premiums.

Allianz, part of Germany’s Allianz Group, posted Rp 8.32 trillion (US$855.6 million) in total premiums during 2012, an 18 percent increase from 2011. The increase is attributed to growth in all of its segments, according to Allianz Life president director Joachim Wessling.

The individual life segment grew 28 percent to Rp 4.81 trillion, while the group life increased 16 percent to Rp 3.03 trillion and health rose 14 percent to Rp 482 billion. 

Bancassurance contributed the most to Allianz Life’s total premium figure at 64 percent, while agents made up 24 percent and other channels the remaining 12 percent. The firm currently had 14,000 agents and 400,000 policy holders, Wessling said.

Allianz Life reported that its new premiums and assets under management (AUM) increased as well last year. While new premiums grew 15.4 percent to Rp 1.7 trillion, the AUM rose by 28.5 percent to Rp 19.06 trillion.

The growth in AUM was in line with the development of the firm’s unit-linked business. Allianz Life deputy president director Handojo Kusuma said that of the total premiums, unit-linked products accounted for 55 percent.

“We launched unit-linked products in 2003. For the past three to four years they have been dominating the new individual life premiums portfolio and in 2012, unit-linked products accounted for 96 percent of the portfolio,” he said.

Throughout 2012, Allianz Life paid out Rp 4.07 trillion in claims and benefits to its customers, rising by more than half. It also reported that its pretax profits surged 15.8 percent to Rp 421 billion from 2011.

Wessling said that with the developments in Indonesia, Allianz Life Indonesia had become one of the group’s biggest companies in terms of new business value. In 2013, it plans on launching two new traditional products and aims at generating 15 percent business growth.

Allianz Life chief operating officer Todd Swihart said that the firm also planned to open 10 agent-training centers in 10 cities to support its business this year. 

Separately, Prudential Life Assurance, part of the UK’s Prudential plc, reported that its total premium income rose by 30 percent to Rp 19.3 trillion in 2012, as a result of strong economic development and rapid growth of the country’s middle-class.

It also managed to book Rp 9.9 trillion of new premiums last year, 24 percent higher than 2011. Meanwhile, the premium income under its sharia business climbed 21.1 percent to Rp 2.1 trillion.

According to Prudential president director William Kuan, last year’s business growth made Indonesia the largest contributor to Prudential in Asia. “In terms of premiums, Indonesia made up 24 percent of Prudential Corporation’s Asian business,” he said.

In 2012, it paid out a total of Rp 5.8 trillion in claims and benefits to its clients, a 47 percent increase compared to 2011. Kuan said that such a surge was expected, in line with the company’s growing business. “As we build up our scale, claims will grow at a similar rate,” he added.

Prudential finance director John Oehmke said that the firm’s unit-linked products showed a positive performance as well throughout 2012, driven by higher interest in the financial markets. It currently offers nine unit-linked products, consisting of six conventional and three sharia products.

Its latest financial statements show that its total funds under management stood at Rp 34.5 trillion, rising 25.6 percent from 2011. Currently Prudential has more than 1.7 million policy holders.

(Tassia Sipahutar/The Jakarta Post)