Manulife takes over ING-Aetna<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
Life insurance firm PT Asuransi Jiwa Manulife Indonesia
\n(AJMI), a local unit of Canadian-based giant Manulife Financial
\nCorp., clinched its second acquisition deal this year in a bid to
\nstrengthen its existence in the country's insurance business.<\/p>\n
AJMI entered into an acquisition agreement on Tuesday with PT
\nING-Aetna Life Insurance Indonesia, a local unit of the
\nNetherlands-based financial service company ING Groupe NV.<\/p>\n
Vice president of AJMI Adhi Purnomo told The Jakarta Post that
\nthe acquisition was aimed at fortifying AJMI's business in the
\ncountry, especially in the life, health and bank insurance
\nsector, and to help protect ING-Aetna policyholders.<\/p>\n
"ING-Aetna has decided to pull out of Indonesia. The company
\nhas chosen AJMI to help protect and manage their policyholders,"
\nsaid Adhi refusing to disclose the value of the deal.<\/p>\n
He explained that the acquisition was positive for the
\ncountry's life insurance industry as it demonstrated Manulife's
\ncommitment to the country and at the same time provided security
\nfor of ING-Aetna's policyholders.<\/p>\n
He said that with the deal, AJMI expected to increase its
\nassets by 25 percent. As of last year, AJMI's assets reached Rp 2
\ntrillion (US$240 trillion).<\/p>\n
With the acquisition, AJMI also expects to increase its market
\nshare to 11 percent this year from around 6 percent last year,
\nand its revenue from insurance premiums to around Rp 1 trillion
\nfrom Rp 700 billion, he said.<\/p>\n
After the acquisition, which is still subject to regulatory
\nprocedures, AJMI policyholders will increase to around 700,000
\nfrom 550,000. ING-Aetna has around 150,000 policyholders.<\/p>\n
Earlier in September, AJMI clinched a deal with Swiss
\ninsurance group Zurich Financial Group for the acquisition of the
\nlatter's Indonesian unit PT Zurich Life Insurance Indonesia, as
\nthe latter was not satisfied with its performance in the
\nIndonesian market. Before the deal, Zurich Indonesia had 110,000
\npolicyholders and generated $7.5 million in premiums.<\/p>\n
The Zurich Financial Group itself has been selling its non-
\ncore businesses, including insurance, as part of a change in
\nstrategy following a record loss of $3.4 billion in 2002.<\/p>\n
Next year, according to Adhi, AJMI will also take over PT
\nAsuransi Jiwa John Hancock Indonesia, a local unit of U.S.-based
\nJohn Hancock, as part of the global acquisition already planned
\nby their parent companies.<\/p>\n
Meanwhile, insurance expert Hotbonar Sinaga said that many
\nforeign-based insurance firms were pulling out of the country
\nbecause they failed to make profits here after several years in
\noperation, or because their parent companies were having
\nfinancial difficulties.<\/p>\n
"It is not easy to engage in life insurance business because
\nyou need at least five years to get to the break-event point, and
\nManulife is among the few foreign-based firms in the country that
\nhas been able to survive and gain profits," Hotbonar said.<\/p>\n
He explained that most of the companies taken over by Manulife
\nwere those that failed to reach the break-event point as planned
\nby their parent companies.<\/p>\n
The companies decided to merge with Manulife because they need
\nto protect and honor the contracts they have made with
\npolicyholders, he said.<\/p>\n
"The number of foreign-based insurance firms operating in
\nIndonesia will decrease in line with stiff competition here. I
\nguess there will only be few companies that survive," he said.<\/p>\n
Top 5 life insurance firms in 2002
\n----------------------------------------------------------<\/p>\n
Assets Premium Market<\/p>\n
Share
\n----------------------------------------------------------
\nAJB Bumiputera 1912 Rp 5.5 t Rp 2.1 t 18.4%
\nAIG Lippo Life Rp 3.5 t Rp 1.7 t 15.3%
\nAs. Jiwasraya Rp 2.5 t Rp 0.9 t 8.5%
\nIndolife Pensiontama Rp 1.0 t Rp 0.8 t 7.1%
\nManulife Indonesia Rp 2.0 t Rp 0.7 t 6.0%
\n-----------------------------------------------------------<\/p>\n
Ministry of Finance<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/manulife-takes-over-ing-aetna-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }