PT Astra CMG Life set for expansion

JAKARTA (JP): Joint venture PT Astra CMG Life plans to acquire up to 10 local life insurance companies in its expansion strategy.

Company president Steve Heald said on Tuesday the deals were still in negotiation but were expected to be finalized by the end of the year.

"Acquisition is an effective way of boosting our growth amid the currently depressed condition of the life insurance industry," he told a news briefing.

He said the insurance company allocated about Rp 45 billion (about US$6 million) for the acquisition plan.

Heald added that the new minimum capital requirement of Rp 100 billion for life insurance firms would force ailing companies to merge or sell their companies in order to survive.

"This is a good opportunity for our company to expand," he added.

He said Astra CMG would open five new branches later this year to expand its nationwide network to 25 in provincial capitals.

"We expect to increase our market share of individual life policyholders from 3 percent now to 10 percent within five years," Heald said.

The company, which is an equal partnership between Indonesia's Astra International and Australia's Colonial Mutual Group (CMG), has 315,000 customers, he added.

Marketing director Suparno Djasmin said the company booked an increase of 50 percent in total premium income to Rp 32 billion in the first half of the year.

Suparno said Astra CMG, the third largest joint venture life company, expected a 55 percent increase in premium income for the year. (01)