State firms eye 10 percent drop in profit under new priorities

The government has targeted a negative net profit growth for state-owned insurance companies due to new social priorities set for firms.

Secretary to the State SOE Minister Said Didu said Friday that the government had demanded the four biggest state insurance companies no longer place financial performance as top priority.

The State SOE Ministry has published its 2010 outlook on state companies, revealing that state insurance firms, comprising 10 companies, is targeted to reach Rp 4.1 trillion (US$ 446.9 million) in net profit, down by 10 percent from last year’s Rp 4.55 trillion.

“In line with the 2004 Social Security System Law, four state insurance companies will focus on public service and their capital expenditure on upgrading service quality instead of seeking more profit,” he said.

Said was referring to four companies, comprising PT Asuransi Kesehatan (Askes), PT Jamsostek, PT Asuransi Abri (Asabri), and PT Taspen, that insure workers, active and retired civil servants, as well as active and retired military officers.

The six other state insurance firms that focused in commercial businesses would continue to gather profit, Said said. The six are PT Asuransi Jasa Raharja, PT Asuransi Ekspor Indonesia (Asei), PT Asuransi Jasa Indonesia (Asindo), PT Asuransi Kredit Indonesia (Askrindo), PT Asuransi Jiwasraya, and PT Reasuransi Umum Indonesia (RUI). (bbs)