Manulife may acquire more local companies

Manulife may acquire more local companies

Sari P. Setiogi, The Jakarta Post, Jakarta

PT Asuransi Jiwa Manulife Indonesia (AJMI), a life insurance
and investment services provider, which is majority-owned by
Canadian-based Manulife Financial, plans to expand its operations
by acquiring ailing local competitor companies this year.

"Because many insurance companies failed to increase their
risk-based capital (RBC) to the required minimum level of 75
percent by the end of 2002, we see an opportunity to acquire some
of them," vice president director Adi Purnomo told a press
conference on Wednesday.

RBC is the ratio between capital and investment exposure.

Because many insurance companies in Indonesia are facing
operational difficulties, the government has issued a regulation
requiring all insurance firms to have a minimum RBC level of 75
percent by the end of 2002, 100 percent by the end of 2003 and
120 percent by the end of 2004. The government is threatening to
close down any insurers who fail to meet this requirement.

According to a finance ministry official, nine out of the
country's 170 insurance companies may have to be closed down for
failing to meet the minimum requirement of RBC by the end of last
year.

AJMI acquired two competitor companies, AMP Panin and Ongko
Life in 1998, and purchased Principal Indonesia in 2001.

Adi said the planned acquisitions would be part of his
company's efforts to expand the business of the company, which
currently holds 11 percent of the market share in the country.

Meanwhile, company president John Harrison said the company
planned to increase the number of its customers to one million
and its total managed assets to Rp 10 trillion by 2005.

Presently, with about 420,000 customers, Manulife Indonesia
manages total assets worth Rp 5.7 trillion, which indicates a 128
percent increase from the Rp 2.5 trillion as of the end of 2001,
he said.