Principal Indonesia seeks local partners

JAKARTA (JP): PT Asuransi Jiwa Principal Indonesia plans to ally with or acquire several local insurance and finance companies in a bid to expand its business in Indonesia, the company's vice president Iskandar Sutadisastra said on Wednesday.

"We are looking for companies with high growth potential that have a wide network of branches, and we have set aside between US$30 million and $100 million for new investment," Iskandar told reporters.

Iskandar added that his company saw a great potential for long-term growth in the insurance industry in Indonesia in spite of the present crisis.

Principal, he said, booked Rp 5 billion (about US$568,180) in premium revenues last year, up sharply from Rp 1 billion in 1997.

Doug Rasmussen, the company's director, said the government's plan to remove the monopoly granted to state-owned insurance company PT Jamsostek was an opportunity Principal Indonesia would not want to miss.

"We are at the final stage of negotiations for an alliance agreement with the three state-owned firms which will soon be the competitors of PT Jamsostek," Doug said.

"In these deals Principal Insurance will be a service provider," he added.

He explained that services Principal Indonesia can provide include administration and investment management.

Principal Indonesia is an insurance company operating retirement plans, employee benefit plans as well as medical and life insurance.

The company is owned by The Principal Financial Group (80 percent) and PT Griyawirya Mudamaju (20 percent).

The Principal Financial Group is a Des Moines, Iowa-based insurance company with more than $80 billion in assets under management worldwide. (02)