Indonesia-based PT Victoria Insurance has posted IDR2.33 billion (US$174,800) of pre-tax profit for the first quarter of 2017, a 42% year-on-year decline.

According to the company’s president and director, Loekito Saggitariono, the decrease in profit was due to a sharp rise in gross claims at IDR4.1 billion (US$308,480) for the first quarter of 2017 compared to IDR2.4 billion (US$180,500) during the same period last year, a 70.83% spike.

“The gross claim increase has driven us to reserve premiums of IDR3.6 billion (US$270,800) to be used as back up funds for disbursement for possible claims,” Loekito told The Jakarta Post.

The upswing in claims negated a slight increase in gross premiums, which reached IDR11.81 billion for the first quarter, up from IDR11.50 billion from last year.

However, Loekito expressed optimism that the insurer will still be able to meet its year-end profit goal of IDR9 billion (US$677,150).

“The first quarter indeed was a bad situation for insurance companies. We really do hope for an improvement in the fourth quarter, which usually contributes around 35%, according to portfolio ratios,” he said.

Victoria Insurance will soon open a new marketing branch in Central Java, which is expected to further contribute to the insurer’s revenue.


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