Indonesia Bank Rakyat invites Cardif, Ageas to bid for insurance unit-sources (updated)

Hanwha Life Insurance

08/06/2015 04:11

* The deal could fetch up to $600mln for BRI -sources 
    * Cardif seen as a strong bidder - sources 
    * Indonesia is one of the world's most under-insured markets 
 
 (Adds details of Indonesia insurance market, previous M&A) 
    By Denny Thomas and Fransiska Nangoy 
    HONG KONG/JAKARTA, June 8 (Reuters) - Bank Rakyat Indonesia 
(BRI)  BBRI.JK  has invited about six companies including BNP 
Paribas Cardif  BNPP.PA  to bid for a 40 percent stake in its 
insurance unit, in a deal worth up to $600 million, sources 
familiar with the matter said. 
    The sale by the country's second-largest lender comes amid 
high foreign interest in Indonesia's insurance market - one of 
the fastest growing and most under-insured markets in Asia - at 
a time when many global insurers are battling sluggish growth in 
their home markets.     
    Other firms invited to bid include Japan's Tokio Marine 
Holdings Inc  8766.T , Belgian insurer Ageas SA  AGES.BR  and 
South Korea's Hanwha Life Insurance Co  088350.KS , the sources 
said, declining to be identified as the discussions were 
confidential. 
    State-run BRI, BNP Paribas Cardif, Ageas and Tokio Marine 
declined to comment on the bidding process. A spokesman for 
Hanwha said it does not yet have a concrete plan concerning the 
asset. 
    BRI said last month that it hired JPMorgan  JPM.N  to manage 
the sale of the stake in its unit, BRIngi Life, adding the 
official bidding process would start in July. It expects to 
conclude the deal before year-end.  ID:nJ9N0XQ004  
    French insurer Cardif is seen as a strong bidder after it 
lost out to Japan's Sumitomo Life Insurance Co  SMTLI.UL  for a 
40 percent stake in the life insurance unit of PT Bank Negara 
Indonesia  BBNI.JK  two years ago, the sources said. 
    Cardif also has a successful venture with State Bank of 
India  SBI.NS  and Bank Rakyat Indonesia (BRI) has a similar 
profile to SBI, they added. 
    While BRIngi Life is small, earning 1.83 trillion rupiah 
($140 million) in premium income last year, compared with market 
leader Prudential's  PRU.L  26.18 trillion rupiah, a foreign 
insurer would be able to quickly ramp up the business leveraging 
the parent bank's 50 million customers. 
    "The BRIngi Life deal will be benchmarked to BNI Life," said 
a banker familiar with the sale process. "These businesses are 
not very big on their own but people are looking at what they 
can achieve." 
    In addition to Prudential, Allianz and Manulife Financial 
 MFC.TO  are among global insurers that have a large presence in 
Indonesia. 
    Indonesia was Asia's 10th biggest insurance market in 2013 
with a total premium income of $18.6 billion, according to data 
compiled by Credit Suisse. Life insurance, which accounted for 
80 percent of the total, is forecast to grow 13 percent in 2015. 
    The ratio of life insurance premium to GDP in Indonesia was 
just 1.6 percent in 2013, Sigma Re data shows, compared with 
11.7 percent in Hong Kong and 8.8 percent in the United Kingdom. 
    $1 = 13,271 rupiah) 
 
 (Additional reporting by Cindy Silviana in JAKARTA, Leigh 
Thomas in PARIS,; Anshuman Daga in SINGAPORE, Taiga Uranaka in 
TOKYO, and Joyce Lee in SEOUL; Editing by Miral Fahmy and Edwina 
Gibbs) 
 ((anshuman.daga@thomsonreuters.com; +65 6403 5676; Reuters 
Messaging: anshuman.daga.thomsonreuters.com@reuters.net)) 
 
Keywords: BANK BRI INSURANCE/