Allianz Enjoys Solid Growth in Indonesia Microinsurance Business
Jakarta. German insurance company Allianz saw the number of its Indonesian micro-insurance clients surge by nearly half last year as it expands its reach in Southeast Asia?s largest economy.
The Munich-based insurer provides insurance with premiums that start from as low as 1 euro ($1.08) a year for 3.8 million people in Indonesia, up 46 percent from a year earlier, according to the Allianz Group Sustainability Report 2014 published on Friday.
Allianz micro-insurance performance in Indonesia trails India, its biggest growth market with 39.8 million people insured, expanding 75 percent in 2014.
The two countries constitute almost all of Allianz?s $114 million micro-insurance business globally.
The company said that low incomes in developing country are the most vulnerable to risks associated with natural disasters, accidents and illness.
?The review in Indonesia showed that the beneficiaries of credit life insurance payouts were better off than the families of borrowers who left their debt behind uninsured,? Allianz said in the report.
?It also showed that when insuring female microloan borrowers, there was greater social impact when their husbands were also insured, especially since men are still the main breadwinners in Indonesia.?
In a separate statement, head of Emerging Consumers for Allianz Life Indonesia added: ?In Indonesia, the high potential of micro-insurance needs to be managed in a correct, innovative and efficient way.
?Government support for developments in micro-insurance must be balanced with regulations on the field, and also boost insurance awareness among the Indonesian people.?
Business-wise, even though micro-insurance is not as profitable as conventional insurance products, Allianz believes that it is a preliminary step to introducing insurance products to mass market groups.
While still ?immature,? the business is estimated to have a premium potential of $40 billion a year, Allianz said.
Micro-insurance customers have large potential as they can be at some point transferred into conventional insurance in line with the growing middle class.
The product can also help expand formal financial services to more customers. Market research conducted in 2013 covering micro-insurance customers on the Ivory Coast, India and Indonesia showed that it was the first insurance for 75 percent of the them.
?We anticipate that demand will continue to grow and so we are expanding our business in this area,? Allianz said.
Growth of Foreign Debt Slows in February
Jakarta. Indonesia?s foreign debt grew at a slower pace in February as both the public and private sectors held back from taking on more debt.
The country?s total foreign debt rose 9.4 percent to $299 billion in February, according to data from Bank Indonesia on Friday. The growth was slower than the 11 percent pace in January.
Public foreign debt rose 4.4 percent to $135 billion in February, slower than the pace of 6.1 percent the previous month.
Private companies? foreign debt also increased by a slower pace, 13.8 percent, to $164.1 billion. That compared to 14.4 percent a month earlier.
Most of the debts are due in more than a year?s time, the central bank data showed, easing concern on liquidity pressure for the coming month. The long-term external debt of the public sector reached $131.3 billion, or 98 percent of total public sector external debt. The long-term external debt of the private sector stood at $123.7 billion, or 75 percent of total private external debt.
Long-term foreign debt increased 9.8 percent in February, slower than the 11 percent growth in January. Meanwhile, short-term external debt grew 7.2 percent, slower than 8.1 percent the previous month.
The private companies? foreign debts were concentrated in the financial, manufacturing, mining and electricity, gas and water supply sectors.
Bank Indonesia called the external debt expansion was ?healthy,? but said it would monitor private companies? foreign debt development.
?This is aimed at optimizing the role of external debt in supporting development financing without incurring risks that may affect macroeconomic stability,? the central bank said.
Bank Indonesia has encouraged firms to hedge their foreign exchange liabilities to shield themselves from rupiah volatility. The local currency has fallen 3.4 percent against the US dollar this year, as the greenback gains strength on anticipation of a rate hike by the US Federal Reserve later this year.
Several state-owned companies such as power utility PLN, Krakatau Steel, and flag carrier Garuda Indonesia have entered into hedging agreement with local banks.
Standard & Poor?s said Indonesian companies? debt expanded 240 percent from 2003 to 2013, in line with the growth in capital expenditure and earnings, suggesting a strong credit profile.
The ratings service found Indonesia?s credit profile ?seems most balanced? compared to China and India, but it was also the ?slowest in growing,? S&P said Friday.
Saratoga to Acquire Express Taxis
Jakarta. Jakarta-based investment firm Saratoga Investama Sedaya is taking over a 51 percent stake in listed taxi operator Express Transindo Utama from local conglomerate Rajawali Corpora in a deal valued at around Rp 1.26 trillion ($98.2 million).
?Saratoga Investama Sedaya and Rajawali Corpora have signed an agreement for Saratoga to acquire around 1.094 billion shares of Express Transindo Utama from Rajawali Corpora,? Andi Esfandiari, a director at Saratoga, said in a listing submitted to the stock exchange in Jakarta on Friday.
Saratoga?s president director, Sandiaga Uno, previously said that the investment firm, whose portfolio is largely dominated by infrastructure, was setting aside up to $150 million for investments this year as it eyed more consumer goods companies.
The announcement marks the second acquisition move for a taxi operator this month, after toll road operator Citra Marga Nusaphala Persada said it would gain a controlling stake of Cipaganti Citra Graha for $153 million.
Andi did not disclose the value or conditions of the Express acquisition, noting that both companies were still in the negotiation process. Express shares, which trade on the Indonesia Stock Exchange (IDX) simply as TAXI, shot up 8.5 percent to Rp 1,155, which would value the takeover at Rp 1.26 trillion.
Representatives from Saratoga, Rajawali and Express did not confirm the value of the deal as of the time of writing.
Friday?s stock surge puts Express shares up 12 percent over the past two weeks, although the stock is down 1.3 percent for the year. Express has a market capitalization of nearly Rp 2.5 trillion.
Express is Indonesia?s second-biggest taxi operators, with a fleet of more than 10,000 cabs and more than 18,000 drivers nationwide. The company also offers other transportation services, including bus rentals and limousine services.
Blue Bird Group is the country?s biggest taxi operator and is also listed on the IDX.
Express reported an 11 percent decline in its first-quarter profit, to Rp 118 billion, from Rp 133 billion in the same period last year, due to a growing expenses.
Although revenue climbed by 29 percent to approximately Rp 890 billion, direct costs and general costs rose by 30 percent and 31 percent to Rp 492 billion and
Rp 115 billion respectively.
Once the acquisition is finalized, Express will join a diverse range of companies under Saratoga, including listed coal miner Adaro Energy and cellular tower operator Tower Bersama.
Ireland, UK Join Australia in Requiring Plain Packaging for Tobacco Products
Ireland and the United Kingdom have become the second and third countries, after Australia, to require that cigarettes and other tobacco products be sold in plain packaging, free of free of colorful logos and other branding that encourage tobacco use.
Ireland?s president signed that country?s law last week. Britain?s Parliament gave final approval to its legislation on Monday. These laws, which take effect in May 2016, will require that cigarettes be sold in plain, standardized packaging with large, graphic health warnings.
Pakistan to Introduce Large, Graphic Warnings on Tobacco Products
Pakistan has announced that it will require large, graphic health warnings on all tobacco products, better informing its citizens about the deadly consequences of tobacco use.
Effective March 30, tobacco products in Pakistan must bear warning labels covering 85 percent of tobacco packaging.
With this bold move for public health, Pakistan joins India, Nepal and Thailand as the fourth country to introduce warning labels of at least 85 percent, signaling a strong commitment to reducing the death and disease caused by tobacco use.
John Oliver Takes Down Big Tobacco
The big tobacco companies proclaim loudly and often that they have changed and are now responsible corporate citizens.
But it took just 18 minutes for political satirist John Oliver to rip those claims to shreds and show how Philip Morris International and other tobacco companies target kids around the world and bully countries that try to save lives.
Zuma cancels state visit to RI due to unrest
South African President Jacob Zuma announced on Saturday that he had canceled his state visit to Indonesia, where he had been scheduled to hold bilateral talks with President Joko ?Jokowi? Widodo and attend the Asian-African Commemoration Conference (AACC).
Jakarta's parks need urgent community care
Several of Jakarta?s parks are in urgent need of attention, says Freeletics fitness community founder Handriono Prasetyo.
Indonesians unhurt by xenophobic unrest in South Africa
The Indonesian embassy in Pretoria has confirmed that no Indonesians were hurt during the recent xenophobic attacks in two of South Africa?s biggest cities, Johannesburg and Durban, where six people have reportedly been killed, an embassy official has said.