ASEAN KEY DESTINATIONS
Sun Life to spend $40 million in Indonesia, the most in Asia
Canada-based life insurer Sun Life Financial plans to invest US$40 million in three years in its local wing, PT Sun Life Financial Indonesia (SLFI), to accelerate the firm’s success in the world’s fourth most populous nation.
Sun Life Financial Asia president Kevin Strain said during his recent visit to Jakarta that the investment was the most his firm would spend on organic expansion in the Asian market.
“What we see with Indonesia is that there’s a real opportunity for growth right now and if we miss the window for the next three or five years, we will have missed the opportunity,” he said.
Kevin said that although Indonesia currently contributed to less than 1 percent of the firm’s global premium income of $125 billion last year, the country had become a significant market as SLFI recorded the fastest growth compared to other subsidiaries across Asia, namely those in the Philippines, Hong Kong, Malaysia and Vietnam.
SLFI president director Bert Paterson said that his firm had booked 74 percent growth in premium income in the first quarter this year from its total premium income last year.
SLFI’s premium income grew 13 percent to Rp 855 billion ($74 million) last year from Rp 755 billion the previous year.
Bert said that SLFI’s premium growth outperformed the market’s average premium growth, which stood at around 8 percent last year.
The firm successfully quadrupled its profit to Rp 264 billion last year from only Rp 55 billion in 2012, he added.
“In overall business, we grew 32 percent last year […] We were the fastest growing company,” he said.
Kevin said that to capture a bigger chunk of Indonesia’s growing insurance market, Sun Life would particularly use the allocated investment on people as well as technology and branding.
He said that his firm had targeted to increase its number of agents to 15,000 in three years from the current 7,164.
“We aim to have the most respected agents in the country, those who are well-trained and can deliver strong advise and good services to customers,” he said, adding that SLFI would launch new development or training centers in Medan, Surabaya and Jakarta.
Kevin said that Sun Life aimed to be among the top-five players in the country.
SLFI currently ranks 12th or 13th in insurance market share in the country.
Bert said that to grab a bigger market share, SLFI would not only focus on major cities on Java Island but also other developing cities across the archipelago.
“Medan has risen from 6 percent [in contributions to SLFI’s production] last year to 20 percent this quarter alone,” he said, adding that SLFI booked Rp 12 billion in premiums from the Medan market, accounting for 86 percent of the total Rp 14 billion from the market last year.
Bert said that SLFI had recently opened seven new branches in the city to capture a bigger market share in the city and also planned to eye other cities.
“Although life insurance has been in Indonesia for many years, the market in the country is still immature,” he said.
Indonesia’s total life premiums to gross domestic product (GDP) ratio stood at only 1.2 percent, much lower than those in Malaysia and Japan with 3.1 percent and 9.2 percent, respectively, according to a recent report by Switzerland-based reinsurance firm Swiss Re.
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