Among the companies with high confidence in Indonesia’s future for business is FWD Group –one of Asia’s leading insurance companies.

PT Bank Rakyat Indonesia (Persero) Tbk (BRI) announced on Friday that it is joining forces with FWD in a strategic cooperation plan in life insurance.

FWD has reportedly signed the conditional share subscription agreement to inject capital in the form of new stock into PT Asuransi BRI Life (BRI Life), a subsidiary of BRI. The transaction is still in the process of gaining approval from regulators and other related stakeholders.

Bank BRI president director Sunarso said that the transaction proved Indonesia’s lucrativeness among foreign investors.

“We are pleased to be able to cooperate with FWD, one of Asia’s leading insurance companies. FWD is to inject capital into BRI Life, but BRI will still be the major stakeholder in BRI Life. After the transaction process is completed, BRI and BRI Life will sign a 15-year partnership agreement to develop the life insurance business,” Sunarso explained.

The partnership is expected to strengthen BRI’s value proposition from its customers’ perspective. Furthermore, BRI Life will gain benefits from the expertise of FWD as a company that is established in bancassurance, hence assisting BRI Life in enriching product development, distribution, underwriting, risk management and digital operations and technologies.

Meanwhile, FWD will gain the opportunity of strengthening its role in and commitment to the Indonesian market, as well as emphasizing its status as a leading company in the bancassurance sector through the partnership with BRI.

Insurance is perceived as one of the most important parts of BRI’s overall business, and BRI expects that BRI Life can become the top player in Indonesia’s life insurance market.

The insurance business maintained a positive performance throughout last year, as the Financial Services Authority (OJK) reports that the insurance sector in general grew by 5.91 percent yoy to Rp 913.8 trillion in 2019 from Rp 862.8 trillion in the previous year, according to the Post.

While this positive trend in insurance will boost confidence, BRI is also convinced about FWD’s expertise, track record and capability, and also BRI’s strong customer base.

Sunarso feels that the partnership is ideal for BRI to reach its goal of becoming the top player in Indonesia’s life insurance market.

“We believe that with BRI’s position as a market leader, whether in the micro or consumer segments, and supported by a vast operational network, as well as digital technology, in the future, this partnership will create long-term value for customers and stakeholders alike,” said Sunarso.

In finalizing the partnership, BRI has appointed Morgan Stanley as financial consultant, Hadiputranto Hadinoto & Partner as legal consultant and Pinnacle as the actuarial consultant.

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