Insurance giants eye controlling stake in BNI’s life insurance unit

Insurers are racing to take over state-owned PT Bank Negara Indonesia’s life insurance business, insiders reveal.

Industry leaders such as Prudential and Singapore Life Holdings are just some among the insurance companies considering bidding for the controlling stake in PT BNI’s life insurance business. Jakarta-based conglomerate PT Astra International has also expressed interest in the deal, although all deliberations are still in their preliminary stage and a formal sale has yet to begin, informants familiar with the matter revealed. Other interested buyers could still emerge, they confirmed.

The informants preferred not to be identified as the matter was still private.

Astra, Prudential, and Singlife have yet to announce their interest in the potential transaction, which would value PT BNI Life Insurance at around $1 billion, Bloomberg first reported.

As early as July this year, the state-owned lender discussed selling its 60% stake in PT BNI Life Insurance with advisers as a strategic option. A deal could include a bancassurance partnership, which would permit an insurance company to sell its products in a bank’s branches.

BNI already undertook initial talks over the structure of the potential sale with Sumitomo Life Insurance, which owned the remaining 40% of BNI’s life insurance business. Sumitomo is currently an investor in Singlife, which is backed by private equity firm TPG and UK-based insurer Aviva.

Singlife earlier admitted it was looking to expand across the Southeast Asia region. CEO Pearlyn Phau expressed particular interest in the Indonesia and Vietnam insurance markets. It previously purchased a business portfolio of Zurich Life and Aviva’s Singapore business in what became the biggest insurance deal in the country.

While Prudential has been operating in Indonesia in 1995 via its PT Prudential Life Assurance, the group’s earnings have since been stunted by the pandemic in key regional markets such as Hong Kong, BNN Bloomberg reported. This has crippled the insurer’s penetration of the insurance market in Asia.