US-headquartered Prudential Financial (PFI) is entering the Indonesian life market for the first time through a joint venture with prominent local group CT Corp.
Under the joint venture agreement which has been approved by the OJK, PFI subsidiary Pruco Life Insurance has acquired a 49% interest in CT Corp’s wholly-owned life insurance subsidiary, Asuransi Jiwa Mega Indonesia. The joint venture agreement closed on 3 July.
Mr Charles Lowrey, EVP and COO of PFI’s international businesses, said: “The partnership advances our business growth strategy by expanding PFI’s international footprint into an attractive market with long-term growth potential, low insurance penetration and a well-developed regulatory environment.”
Mr Lowrey added: “We believe CT Corp’s customer reach and strong brand presence, together with PFI’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.”
Mr Chairul Tanjung, Chairman and founder of CT Corp, said: “The need for life insurance is increasing as disposable income, life expectancy and financial literacy improve in Indonesia.”
Indonesia has 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.
Founded in 1987, CT Corp is the largest Indonesian consumer-focused company, managing more than US$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.
PFI is a financial services leader with more than $1 trillion of assets under management as of 31 March 2017. It has operations in the United States, Asia, Europe, and Latin America.