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haria insurer Allianz Life Syariah, part of insurance giant Allianz Indonesia, has warned that a new non-bank financial regulation to be issued by the Financial Services Authority (OJK) later this year may hurt the life insurer'€™s bancassurance business.

Allianz sharia business manager Abdul Chalik said in Jakarta on Wednesday that sales using the bancassurance channel '€” through which insurance products are offered by banks '€” would be affected by the new regulation, which will require banks to reveal the amount of commission they receive from insurers.

'€œCustomers will be able to find out how much a bank earns from selling an insurance product. I don'€™t think it'€™s something that banks are willing to reveal,'€ he said on Wednesday.

Abdul predicted that the new rule would negatively affect the industry'€™s sales, including those of Allianz, even though the insurer'€™s bancassurance segment was relatively low, equal to 12 percent of its total business.

At the moment, Allianz partners with Bank Muamalat and ANZ Indonesia to market its products.

'€œMost of our sales are still generated through agents. We do have plans to collaborate with other lenders for bancassurance, but we have to think this through,'€ he said, adding that Allianz was in the middle of talks with several banks.

Contacted separately, OJK strategic management deputy commissioner Lucky Fathul confirmed the regulator'€™s plan, saying that it would issue new regulations on the non-bank financial sector later this week. '€œ[The regulation on] bancassurance is one of them,'€ he said.

However, despite the bleak future for bancassurance, Allianz remains upbeat about its overall 2014 growth as it has set a growth target of 25 percent.

Last year, the company booked a total of Rp 623.6 billion (US$53.6 million) in gross premium income, Rp 79.85 billion in underwriting surplus and Rp 26.3 billion in net profits.

'€œAllianz Life Syariah'€™s operations now account for 10 percent of our parent company'€™s business,'€ he said.

Abdul added that it would rely on its agents to reach the target. Currently, Allianz employs more than 7,200 agents across the country and expects this number to rise to more than 8,300 by year-end.

It will look for new partners as well offering the products via telemarketing channels. It recently signed an agreement with private lender Bank Central Asia (BCA) to expand its telemarketing.

Prior to the deal with BCA, Allianz had already established similar partnerships with Muamalat and Bank Negara Indonesia (BNI).

Meanwhile, according to Abdul, Allianz is also keen on expanding into the micro segment, even though its current business leans heavily toward the middle-income market.

'€œIt is still less than 1 percent of our business. A large chunk of the micro portfolio is generated by our collaboration with [private lender] Bank Tabungan Pensiunan Nasional [BTPN],'€ he said.

The deeper penetration of the micro segment is also part of the company'€™s effort to comply with an appeal by the OJK.

As reported previously, the financial superbody has been calling on the industry to develop the domestic micro-insurance business.

It is embarking on a micro-insurance pilot project in several provinces this month, along with the Association of General Insurance Companies (AAUI) and the Indonesian Life Insurance Association (AAJI).