US insurance company Prudential Financial, Inc. (PFI) and CT are launching a joint venture (jv) to provide life insurance solutions to a broad spectrum of people in Indonesia through a multi-channel distribution strategy.
Under the recently closed agreement, which has been already approved by the OJK in Indonesia, PFI subsidiary Pruco Life Insurance Company has acquired a 49% interest in CT Corp’s wholly-owned life insurance subsidiary, PT Asuransi Jiwa Mega Indonesia.
The partnership, announced on July 18th at a press conference in Jakarta, leverages PFI’s insurance expertise and advances its business growth strategy through alignment with market insights from CT Corp, Indonesia’s largest consumer-focused company.
Indonesia has the third largest population in Asia and the fourth largest population globally with average annual GDP growth at a 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 of this kind of financial services remains relatively low in Indonesia at a 1.3% of GDP. This is one-third the penetration in Malaysia and half the penetration in India, so there’s still pelenty of room to grow.
As a global leader in financial protection, retirement and asset management, PFI’s businesses work toward making long-term financial security a reality for millions of people around the world. The company serves retail and institutional customers in more than 40 countries worldwide, including Japan, South Korea, Taiwan, China, Malaysia and India. As of Dec. 31, 2016, the company had approximately $3.7 trillion of gross life insurance in force worldwide, including Closed Block policies.
Established in 1987, CT Corp is the largest Indonesian consumer-focused company, managing more than $10Bn 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.
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. PFI’s strong products and operational capabilities combined with CT Corp’s extensive presence and deep understanding of the local market will help provide better protection to our people and in turn strengthen the social and economic potential of Indonesia.”
“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. “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.” And 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.”
Image over the headline.- Charles Lowrey, Executive Vice President and Chief Operating Officer of PFI’s International Insurance businesses -left-, and CTCorp Chairman and Founder Chairul Tanjung shake hands after announcingthe joint venture between the two companies. (Photo: Business Wire)