Connecticut-based Cigna Corporation (NYSE:CI), a global life and health insurance company, has said on Wednesday that Indonesia, among five other potential countries, is considered the next ‘big thing’ in terms of very strong growth potential. Despite being the largest Muslim population country with more than 200 million people, it is facing a bit of a slowdown due to weakening internal and external economic fundamentals.
CEO, David Cordani, pointed to a rising middle-class population, the changing lifestyle, and growing awareness of health care that has led to bullish assessment from the company to dub it as a great opportunity to expand.
During his two-day visit to the company, Mr. Cordani reflected upon the performance of its subsidiary in Indonesia, pointing out that while its contribution might be small relative to global revenues, the growth potential is very enormous, since the health insurance penetration in the market is quite low, at around 2%.
Country Manager for Cigna Indonesia, Tim Shields, also holds the same assessment, sharing his excitement about the strong outlook for the country’s micro insurance. The company believes that it has what it takes to capture a wider market share in the region due to Cigna’s better insurance offerings, which are cheap and affordable to lower and middle-income class. In fact, the products are good enough to easily complement the government’s universal health care program.
It will not be without challenges though. There is a decline in a growth rate (which is still high according to many European standards), the corruption, and bureaucratic hurdles that foreign companies still have to face while operating their businesses in the region. The plus side is that though Cigna is the sole foreign medical health insurance company in the region to cover insurances for the middle class, giving it a great advantage to consolidate its market position before its competitors.
During the visit, Mr. Cordani also announced that the company would move to a new, larger headquarters based on the outskirts of Jakarta, which will be able to better support its operations and new development strategy, with the aim to serve an estimate 1 million customers.
According to financial reports from the company’s subsidiary division, Cigna Indonesia reported net premium income to $51 million, a 6% increase in assets to $145 million. This high potential of Indonesian market appeals the company and might influence its future steps. Cigna Corporation stock price ended the day at $131.86, a gain of less than 3%.
Nicely written :)
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