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Jakarta Post

Allianz remains upbeat in face of RI economic slowdown

House call: Allianz Life Indonesia chief investment officer Alan T

Grace D. Amianti (The Jakarta Post)
Jakarta
Tue, July 7, 2015

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Allianz remains upbeat in face of RI economic slowdown

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span class="inline inline-center">House call: Allianz Life Indonesia chief investment officer Alan T. Darmawan (left), accompanied by head of investment communications Meta Lakshmi Permata Dewi (right), explains the insurance firm'€™s business operations in Indonesia during a media visit to The Jakarta Post office. JP/Jerry Adiguna

Private life insurer Allianz Life Indonesia is maintaining its faith in the country'€™s economy despite slow domestic growth and looming global financial risks, according to an executive.

The firm'€™s optimism was rooted in the large productive-age proportion of the country'€™s 250 million people, helping to push up domestic demand, Allianz Life Indonesia chief investment officer Alan T. Darmawan said.

'€œOverall, Indonesia'€™s story remains good and it is one of the focuses in Allianz group globally, because the country'€™s consumption is still growing. People are still purchasing goods,'€ Alan said during a visit to The Jakarta Post on Monday.

Indonesia'€™s household consumption, which accounts for 56.1 percent of the country'€™s economy, grew only 5.01 percent in the first quarter of this year, compared with 5.3 percent in the same period last year. Overall economic growth was as such dragged down to 4.7 percent from 5.2 percent year-on-year.

The fear of ongoing weak growth lingers. Tax revenues in the first six months of this year were forecast to amount to Rp 555.2 trillion (US$41.5 billion), or only 37.3 percent of the targeted Rp 1.49 quadrillion by the end of the year '€” far below the usual range of between 42 and 44 percent of their respective annual targets.

Despite anticipating an ongoing gloomy outlook, Alan said it was '€œtoo early'€ to conclude that the country'€™s economic growth would fall further, as government spending was expected to speed up in the second half.

More synchronized collaboration between ministers was also expected, Alan said, after President Joko '€œJokowi'€ Widodo recently pushed them to start spending their budgets.

'€œThere will also be simultaneous regional elections in December with a total budget of at least Rp 17 trillion. According to our experience, elections always help trigger economic growth,'€ he added.

Based on the optimism, Allianz Life head of investment communication Meta Lakhsmi Permata Dewi said the company would maintain its growth target of doubling the market this year in terms of premium revenue.

Allianz Life Indonesia booked total gross written premium (GWP) of Rp 9.71 trillion as of last year, an increase of 15.2 percent from a year earlier, according to its financial report.

'€œMost of our premium revenues are of regular premium type, which are more stable because customers keep their routine payments. We also focus our fund management on specific stocks rather than sectors and maintain prudence,'€ Meta said.

Besides traditional life insurance products, Allianz in Indonesia also markets general insurance and employee benefits, with total assets under management (AUM) standing at Rp 25.9 trillion as of last year and insured accounts reaching 4.6 million.

Between 2010 and 2014, the company'€™s compound annual growth rate (CAGR) for its AUM grew 22 percent, putting it third and sixth on the lists of top local insurance firms and fund managers, respectively.

Globally, Munich-based Allianz group ranked third, Alan said, with total AUM worth $2.3 billion, behind New York-based Blackrock Inc and Pennsylvania-based Vanguard Investments.

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