NEW DELHI / AP
AJB Bumiputera 1912, the century-old Indonesian life insurer, is exploring a sale of its business to an overseas investor as it seeks to meet obligations of its more than 5 million policyholders, people with knowledge of the matter said.
The Jakarta-based firm is working with a financial adviser to identify potential buyers, including international insurers, the people said. It is restructuring its business to separate good and bad assets and could seek at least $1 billion from any sale once the revamp is completed, the people said, asking not to be named as the process is private.
Bumiputera 1912, the country’s first national insurer owned
by its customers, is reorganizing as it tries to improve its finances
and meet growing obligations. The firm was able to satisfy a minimum risk-capital ratio last year following a regulatory warning more than a year before, according to a MetroTV report in April 2015 citing a regulatory official.
The insurer has 350 branch offices in the country, employs more than 3,000 staff and has more than 30,000 agents, its website shows. Bumiputera 1912, founded by three teachers, offers products including savings plans, education insurance and retirement planning.
Representatives for Bumiputera 1912 said they couldn’t immediately comment. The insurer
aims to complete a years-long restructuring process at the end of 2016, Dumoly Pardede, deputy commissioner at Indonesia’s Financial Services Authority, known as OJK, said by phone last week.
It has more than 13.5 trillion rupiah ($1 billion) of assets, according to its website.
Indonesia’s supreme court this year ordered the insurer to pay claims made by former clients of PT Asuransi Jiwa Jaminan, a subsidiary it sold in 2001. The sale and purchase agreement didn’t include 24.9 billion rupiah of insurance contracts held by Asuransi Jiwa Jaminan, resulting in unpaid claims, according to court documents.