Government issues zero coupon bonds for Jiwasraya

The government plans to issue zero coupon bonds to rescue finance performance of PT Asuransi Jiwasraya by 2010.
Deputy State Enterprise Ministry for bank and other finance service Parikesit Suprapto said the amount of fund injection to Jiwasraya discussion is underway.
"The realization of the funding for Jiwasraya is likely to be done next year."
When asked about the zero coupon bond issuance, he said the State Enterprise Ministry still discusses the option jointly with the Finance Ministry.
The government formerly through State Enterprise Ministry prepared two options to boost up Asuransi Jiwasraya capital by injecting fund or issuing bonds to help survive the corporate capital deficit.
Jiwasraya targets to grow the premium this year up to IDR2.8 trillion or rose 12 percent as from DIR2.5 trillion in 2008 through the contribution of group customers through agency. Jiwasraya keeps expanding tradition products from insurance group and unit linked to support the business expansion this year.
Jiwasraya recorded IDR18 billion unaudited profits last year owing to the efficiency and investment proceeds. The 2008 profit target was actually IDR30 billion but it failed to reach it due to the high rate of claims.
The largest corporate investment composition in 2008 was still on mutual fund product and bonds or 60-70 percent of the total investment values of IDR3 trillion. Now Jiwasraya booked IDR480 billion investment gains.
The government has prepared the formation of insurance holding company and Jiwasraya is designed as the holding company. The government also has stocks at Jasindo, smaller portion at Tugu Pratama, and Asei. The capital rise in Jiwasraya enables the company to become the state insurance holding company.