JAKARTA (TheInsiderStories) – Pruco Life Insurance Company, subsidiary of Prudential Financial, Inc. (PFI), has acquired a 49 percent interest in CT Corp’s wholly-owned life insurance subsidiary, PT Asuransi Jiwa Mega Indonesia (Mega Life). The joint venture (JV) agreement closed on July 3, 2017.
PFI’s Strategic partnership expands access of Indonesia’s growing middle class to financial protection and insurance solutions. PFI launched its first life insurance business in Asia in Japan in 1988, subsequently expanding to Taiwan, South Korea, India, China and Malaysia.
“We’re pleased to partner with CT Corp, which controls one of Indonesia’s largest and most prominent business groups, as we enter this market for the first time to introduce our offerings and capabilities to serve the needs of the Indonesian market,” said Charles Lowrey, executive vice president and chief operating officer of PFI’s International businesses.
Chairul Tanjung, chairman and founder of CT Corp, highlighted that “the need for life insurance is increasing as disposable income, life expectancy and financial literacy improves in Indonesia.”
Founded in 1987, CT Corp is the largest Indonesian consumer-focused company, managing more than $10 billion in assets and more than 100,000 employees. The group is a leading player in the financial services, media, retail, property, lifestyle and entertainment sectors in Indonesia.
Indonesia has the third largest population in Asia and the fourth largest population globally with average annual GDP growth of 5.3 percent over the last 15 years. While life insurance premiums in the country are projected to grow at a compound annual growth rate of 13 percent between 2015-2020, penetration remains relatively low at 1.3 percent of GDP, which is one-third the penetration in Malaysia and half the penetration in India.
Chairul Tanjung told the press on Tuesday (18/7) that Mega Life builds the partnership with America-based Prudential, instead UK-based Prudential which has long operated in Indonesia.
So, Chairul said, America-based Prudential opts to enter Indonesia through setting up JV with name of Pruco Life Insurance Company, to avoiding using Prudential, a popular name for UK-based Prudential already operating in Indonesia.
“For us, we intend to bring Mega Life as the largest life insurance in Indonesia. That’s why we build a strategic partnership with Prudential, one of world largest financial institution,” said Chairul.
He declined to disclose the value of JV as this partnership is fairly complicated. “The process is not easy. We have already talking for three years,” Chairul said.
After the deals, He continued, CT Corp places its representative to act as chief commissioner for Mega Life while the president director from PFI.
CT Group has various businesses and focuses on consumer business. “With the partner, we are combining so the company becoming very strong, becoming the champion, very difficult for people to beat,” Chairul said.
“We plan to institutionalize all companies, to combine them in a partnership. My target is to institutionalize all subsidiaries of CT Corp with the best player in the world within five years,” Chairul stated.
The partnership is the strategic step, then step up to IPO (initial public offering) with the status of one world class player, He added.
CT Corp opts to growing its business through the acquisition over other assets (in-organic growth). Chairul claims, his Group as one and the only private business group that makes huge investment. “We invest US$1 billion in one year,” he said.
(Written by Linda Silaen, Email: firstname.lastname@example.org)
The Insider Stories offer insight on Indonesia's economy. We provide a global reference for industry intelligence, news, information and data. We are the bridge that connects investors, the business community and policymakers. We are active across digital and events.