Tugu Growth Will Be Boosted By Retail Segment Expansion In 2025

Rupiah (photo: antara)

JAKARTA - The expansion strategy to the retail segment is considered to be a catalyst for the growth of PT Asuransi Tugu Pratama Indonesia Tbk (Tugu Insurance/Tugu) in 2025.

TUGU is known to have expanded into motorized vehicle lines, fires and property, as well as travel.

BCA Sekuritas analyst Ryan Santoso highlighted that collaborative strategies with retail players as well as digital transformation can help smooth the TUGU's efforts to penetrate the retail segment.

"Retail characteristics are the mass market, which means playing a lot with volume. To achieve that volume, the TUGU strategy is with strategic collaboration for customer base accessibility and digital transformation of insurance platforms," he quoted Antara as saying.

According to him, with a collaboration strategy, TUGU can expand its consumer base which has a higher volume, by maintaining optimal agent commission cost efficiency and "underwriting" quality.

"This could be a sustainable growth strategy," Ryan said.

On the other hand, digital transformation by presenting a platform that can be accessed for retail is important because the cost for agents is relatively large. With a digital platform, the process can be simpler so that customers can directly access insurance products from TUGU without going through agents or brokers.

"The cost for large agents can be saved, but at the same time, the quality of 'underwriting' can also be maintained properly," he added.

Ryan argues that with this strategy TUGU can expand its market share in the retail segment with quality growth in 2025 and in the future.

TUGU's expansion efforts to the retail segment are also one of the factors that encourage international rating agency AM Best to maintain A- rating for the company. This ranking is the 9th for TUGU.

In a recent report released on January 24, 2025, TUGU managed to maintain Financial Strength Rating (FSR) at A- (Excellent) and Long-Term Issuer Credit Rating (Long-Term ICR) levels on a- (Excellent).

The company's main advantage is direct access to Pertamina's group-owned businesses, their parent company. In addition, TUGU continues to expand its portfolio to the reinsurance and retail business segments to support revenue diversification.

AM Best assesses the strategic steps taken by TUGU to improve its business portfolio to help strengthen the company's performance.