G

eneral insurance firms bagged Rp 4.8 trillion (US$489.89 million) in net profits throughout 2012, rising 21.9 percent thanks to higher operational and investment incomes, according to the Association of Indonesian General Insurance (AAUI).

The association reported in Jakarta on Monday that of 78 firms, 54 saw net profits increase from the previous year, 15 recorded flat or lower net profits and nine suffered from net losses.

AAUI executive director Julian Noor said there were actually 81 general insurance firms registered as of December 2012.

But three companies were excluded from the combined report because of their business novelty and data mismatch.

In operational income, the firms booked Rp 1.8 trillion, up from Rp 1.02 trillion in 2011. Meanwhile, in investment, they managed to gain Rp 3.28 trillion, a 10.4 percent growth from a year before.

Julian said the investment income was mostly derived from time deposits. 'There are many investment options available for insurance companies, from time deposits to mutual funds, but so far, time deposits remain the preferred option with about 50-60 percent contribution,' he said.

With thriving business, the companies saw rises in their operating expenses as well, surging 11.7 percent to Rp 5.58 trillion.

According to AAUI, the companies booked Rp 39.41 trillion in total gross premiums last year, 14.3
percent higher from 2011.

Automotive premiums made up for the most of the figure with Rp 11.59 trillion or 30 percent, while properties contributed 27.9 percent, health and personal accident 13.3 percent and cargo 6.3 percent.

Meanwhile, the AAUI said that a satellite incident had boosted the total claims figure in 2012 by 34 percent to reach Rp 17.13 trillion.

Last August, state-owned PT Telekomunikasi Indonesia (Telkom) reported that one of its satellites went missing after a rocket that carried it malfunctioned.

The satellite, dubbed the Telkom 3, reportedly worth $185 million, failed to reach orbit after jetting off from the Baikonur Cosmodrome in Kazakhstan.

The satellite incident was included in the airplane claim segment, which jumped more than seven times to Rp 1.98 trillion. Besides aviation, the automotive claim segment grew 15.5 percent from 2011.

Julian said that as of December 2012, about 31 firms had met the minimum capital requirement of Rp 70 billion, 43 firms had exceeded the requirement by owning more than Rp 100 billion in capital, while the remaining four firms were in the process of reaching the minimum requirement.

'By December 2014, all these firms are required to have Rp 100 billion in minimum capital by the regulator. So, we will see these companies inject more capital between now and 2014,' he added.