Zurich Wants to Triple Market Share, Become No. 6 in Indonesia
Switzerland-based financial services provider Zurich Financial Services Group expects to triple its market share and join the top six players in Indonesia by 2016 when its premium income from general insurance products would be expected to top Rp 2 trillion (US$234 million).
Group chief executive officer Martin Senn said on Tuesday that his firm currently maintained a 1.2 percent share of the Indonesian insurance market and ranked 20th on the list of Indonesia’s top insurance firms.
In 2010, the company booked Rp 407 billion in general insurance premium income, and this year the figure is estimated to reach Rp 450 billion, according to the firm’s data.
“We are very confident that this is achievable. With a population of almost 250 million, a growing middle class and a low penetration rate, naturally there’s a huge opportunity to benefit from these conditions,” he told reporters at a press briefing on Tuesday.
Swiss Re, the world’s leading reinsurer, recently said that last year, Indonesia’s life insurance premiums were about $7.2 billion with a penetration rate of 1 percent and from 2006 and 2010 they grew by an average of 16.7 percent annually.
Meanwhile, non-life insurance premiums, covering house and vehicle protection for example, were valued at $3.5 billion with a 0.5 percent penetration rate during the past year and recorded 3.7 percent growth over the 2006 to 2010 period.
Senn said that in line with the target, his firm expects to boost Indonesia’s contribution to Zurich globally, which is current still very low.
He added that Indonesia would be one of his firm’s top priorities for investments due to the huge, fast-growing and sustainable market, where demand for insurance products was driven by a growing economy.
However, Senn declined to provide further details on the planned investments.
Zurich, he said, would focus on the individual and small and medium-sized business segments in Indonesia to achieve their target.
Meanwhile, Jonni Setiadi, chief financial officer of Zurich local subsidiary, PT Zurich Insurance Indonesia, said that his firm would develop the retail segment to generate future growth.
“We want to do something achievable and we feel that in the next five years, small and medium enterprises as well as individuals, instead of big corporations, will become the backbone of our growth in Indonesia,” he said.
Currently, with more than 100 big companies, such as Holcim and Nestle, as clients, the corporate segment contributed to more than 50 percent to its total premium income, he said, adding that the figure had declined from 60 percent recorded last year.
“By 2016, we expect that the retail contribution will reach 70 percent,” he explained.
General insurance products — property, car and accident and health — were largely behind the firm’s growth, he said.