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ife insurer Sun Life Financial Indonesia plans to strengthen its bancassurance business, the marketing of insurance products through banks, after its Canada-based parent company bought out its joint venture with Malaysian financial group CIMB.

After concluding four-month long negotiations, Sun Life Financial Inc. purchased the 51 percent stake CIMB owned in the two companies’ joint venture, CIMB Sun Life, the operation of which is now being integrated in Sun Life Financial Indonesia.

Sun Life Financial Indonesia president director Elin Waty said Thursday that the integration would allow the company to develop its bancassurance service, which only served around 20 percent of its customers prior to the takeover.

Elin said that 40 percent of Sun Life’s distribution would be through bancassurance services after the merger, while the other 60 percent would be through its 10,200 agents in 70 cities across the country.

“A stronger bancassurance channel will better Sun Life’s service to its customers,” she told a press conference, eyeing to increase the contribution of its bancassurance service to 50 percent in the future by forging more partnerships with lenders.

Sun Life had been partnering with CIMB’s Indonesian lender CIMB Niaga to market its products before the merger. That cooperation is set to continue for another three years following the integration.

Apart from CIMB Niaga, Sun Life partners with numerous lenders to market its products, namely state-owned Bank Negara Indonesia (BNI), private lender Bank Central Asia, Commonwealth Bank, Bank OCBC NISP and Bank Nobu.

“We can distribute many of our products through the bancassurance channel, ranging from simple insurance to sophisticated ones like unit-linked products. That is why we are committed to ensuring our bancassurance service will cater well to the various needs of bank customers,” Elin said.

The integration has increased Sun Life’s assets to Rp 9.14 trillion (US$694.64 million), making it the seventeenth-largest insurer in the country. It marks the first merger in the industry since the issuance of the 2014 Insurance Law, which requires two sister insurance firms owned by a single company to be merged.

In the first half of the year, Sun Life Financial Indonesia booked premium income of Rp 586.4 billion, a 10 percent year-on-year (yoy) increase. The insurer beat average industry growth, Elin claimed.

Sun Life Financial Asia president Kevin Strain, who was also present at the briefing, said the transaction was an important step for Sun Life to strengthen its foothold in the country.

“Indonesia is a very important market for Sun Life in Asia. With the largest GDP in the region, the largest population and the underserved population when it comes to insurance, it is a tremendous opportunity for the company to grow in Indonesia,” Strain said.

Conventional insurance premiums accounted for just 2.37 percent of the country’s gross domestic product (GDP) during the first quarter of the year, according to Financial Services Authority (OJK) data. Life insurance premiums, meanwhile, amounted to 0.93 percent of GDP in the January-March period. (mos)