US-based Prudential Financial, Inc. has entered the Indonesian life insurance market for the first time via a joint venture with CT Corp, a prominent local consumer-focused business group.
Under the recently closed agreement, which has been approved by the Indonesian regulator OJK, Prudential’s Pruco Life Insurance Company has acquired a 49% stake in CT Corp’s wholly-owned life insurance subsidiary, PT Asuransi Jiwa Mega Indonesia.
Mr Charles Lowrey, executive vice president and chief operating officer of Prudential’s international businesses, said: “The partnership advances our business growth strategy by expanding our international footprint into an attractive market with long-term growth potential, low insurance penetration and a well-developed regulatory environment.”
“We believe CT Corp’s customer reach and strong brand presence, together with Prudential’s longstanding insurance and asset management expertise—supported by our operational and technological processes, product innovation, risk management and talent—will expand options for Indonesia’s growing middle class to gain financial protection for their families,” he added.
Mr Chairul Tanjung, chairman and founder of CT Corp, said that the need for life insurance is increasing as disposable income, life expectancy and financial literacy improves in Indonesia.
As of 31 December last year, the company had approximately $3.7 trillion of gross life insurance in force worldwide, including Closed Block policies. Prior to this deal, Prduential’s businesses in Asia were primarily in Japan, Singapore, South Korea, Taiwan, China, Malaysia and India.
Indonesia has the third largest population in Asia and the fourth largest population globally with average annual GDP growth of 5.3% over the last 15 years. While life insurance premiums in the country are projected to grow at a compound annual growth rate of 13% between 2015-2020, penetration remains relatively low at 1.3% of GDP.
Prudential Financial, Inc. has more than $1 trillion of assets under management as of March 31, 2017. It has operations in the United States, Asia, Europe, and Latin America.
CT Corp is Indonesia’s leading integrated consumer-focused business group. Primary areas of focus include financial services, media, retail, property, lifestyle, and entertainment. Its prominent businesses include Bank Mega, the largest Visa credit card issuer; Carrefour and TransMart, the largest hypermarket player; Trans TV and Trans 7, two leading free-to-air channels; TransVision, the #2 DTH pay TV provider; and Detik.com, the #1 online portal in Indonesia. The group is also the largest private shareholder of Garuda Indonesia, the country’s flagship carrier.