0 BTN, Jasindo ink cooperation agreement

Bank Tabungan Negara (BTN) and PT Asuransi Jasa Indonesia (Jasindo), in a bid to strengthen their positions amid stiff competition in the insurance and banking sector, have agreed to work together in various sectors, including the establishment of a joint life insurance firm. BTN and Jasindo, both state-own companies, sealed a deal through a Memorandum of Understanding (MoU) signed by the companies’ directors in Jakarta on Monday, the signing was witnessed by State-Owned Enterprises Minister Dahlan Iskan. 

Jasindo director Budi Tjahjono said during the event that the cooperation aimed to boost the companies’ income and expand their network through the mutual harnessing and channeling of the companies’ products. “Indonesia’s insurance market saw a 23.6 percent growth in 2011 and is predicted to see double-digit growth each year. We need to lay down a business strategy to compete and cooperation between two state-run enterprises will reap benefits, not only for the companies but also for the public,” Budi said. 

Under the agreement, BTN will facilitate Jasindo’s employees with housing loans (KPR). The insurance company, its subsidiaries and affiliated companies will also have access to commercial loans. In return, Jasindo will open bank accounts at publicly-listed BTN for its employees monthly salaries. The two state-owned enterprises also agreed to establish a joint life insurance company in the second half of this year. BTN director Maryono said both parties were still studying the plan but the bank was ready to disburse Rp 50 billion (US$5.14 million) to support it. 

He also added that BTN and Jasindo were deliberating the acquisition of existing insurance companies if it was proven to be more profitable. “We want to become a major share holder in an insurance company. Jasindo is an experienced player in this sector,” Maryono explained. He said that BTN expected the plan could help the bank to meet its target of raising fee based income by 66 percent to Rp 560 billion this year, compared to Rp 300 billion last year. 

Maryono said that BTN aimed to channel Rp 104.49 trillion in loans this year, an increase of 29 percent compared to Rp 81 trillion in 2012. BTN also targets a 49 percent increase in third-party fund to Rp 120.69 trillion this year, compared to 81 trillion last year. The bank, whose assets grew 25.39 percent to Rp 112 trillion in 2012, has targeted to book 36 percent growth to Rp 1.84 trillion in 2013 compared to last year. Jasindo, on the other hand, reaped a premium income of Rp 3.85 trillion in 2012, up 15 percent compared to 2012. 

The insurance company saw a 133 percent growth in claims to Rp 3.4 trillion from Rp 1.4 trillion in 2011. Budi said that the company booked Rp 325 billion unaudited profits, or up two 2 percent compared to Rp 316 billion in 2011. Dahlan said he expected the cooperation would boost the two enterprises in their respective sector. “BTN has to work harder to catch up with other state-owned banks and Jasindo, despite being the biggest state insurance company, is way behind other insurance companies,” he said. (aml)

source : the jakarta post