JAKARTA: The slight premium generated and the tariff war on property
business have made loss insurance maximize the cars and marine cargo
insurance business.
Vice President Technical Division PT Asuransi Central Asia (ACA) Debbie
Wijaya said the company did not do any special effort to minimize fire
insurance business and make it balance by expanding car insurance.
Fire insurance as the largest premium contributor has been shifted to car
insurance.
Fire insurance in 2007 hit IDR397 billion or rose from IDR320 billion in
2006. But car insurance has higher growth as from IDR314 billion in 2006
into IDR420 billion.
"So the fire insurance portion to the total premium dropped from 41
percent into 39 percent or less than that of car insurance," she said to
Bisnis this week.
The premium has less in number due to the fact that many insured that does
not have any incident and propose claim will call for insurance discount
this year.
"On the renewal, they will have window shopping so as to move if they get
lower price offer. Whereas, the insured should have been careful to see
the insurance company service quality, not simply the price," she added.
The tough competition in insurance industry has become one of the major
factors causing the less premium rate. Meanwhile, the car premium rate
remains standard and the issuance of PMK No. 74/2007 on Car Insurance has
limited the abnormal acquisition cost.
"If we have no support from the government on the property business
regulation as that of in car, we start seeing other more profitable
business," she said.
In addition to car insurance, the other major business line which might
tap premium is marine cargo and individual product such as trip insurance.
PT Asuransi Binagriya Upakara minimizes the fire insurance for corporate
and move to retail insurance including car insurance.
"The competition is so tough and property price is no longer realistic,"
said President Director of Binagriya Upakara Kapler A. Marpaung.
To realize the plan, Binagriya seeks cooperation with four multifinance
companies to boost up car insurance performance so as to hit the premium
target of IDR17 billion.
Separately, Operation General Manager PT Asuransi Tri Pakarta Yulius Patty
said the company relies on fire insurance with its 50 percent contribution
to the total of premium.
The company has so far marketed fire insurance through banks so that it
should provide the products required by bank. Besides, fire insurance risk
is less than the car insurance despite the less premium.
"Fire insurance uses per mil, car insurance uses percent. So, the
insurance price of one car might equal to 10 property insurance, but with
less risk than the mobile risk as car," Yulius said.
Lecturer with the Trisakti's School of Management Munawar Kasan said the
tariff war on property insurance gets worse.
"The insurance premium is like cellular tariff with 0,0000% calculation
due to their fond of premium. The inflation makes all prices soar but fire
insurance premium," he added.
The insured commonly called for premium cut down on the renewal with
abnormal demand of 30-40 percent.
"In fact, insurance could provide profit commission or no claim bonus with
normal variable as included in the policy."
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