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Tycoon to inject Rp 2t in fresh capital into ailing Bumiputera
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Rescue mission: Asuransi Jiwa Bersama Bumiputera 1912 statutory management coordinator Didi Achdijat (second right) and statutory managers Yusman (left), Sriyanto Muntasram (second left) and Adhie Massardi prepare to take questions in a press conference on Dec. 28. (JP/Anton Hermansyah)
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consortium led by business tycoon and media mogul Erick Thohir has agreed to inject Rp 2 trillion (148.3 million) of capital into PT Bumiputera Life Insurance (BLI), a newly established life insurance firm that will continue the operation of the century-old Asuransi Jiwa Bersama Bumiputera 1912.
Bumiputera statutory management coordinator Didi Achdijat said that the Financial Services Authority (OJK) had approved BLI's insurance business license last month, paving the way for it to begin operating early next year.
"The investor has already committed. Mr. Erick already signed the memorandum of understanding [for the capital injection] last week," Didi said on Wednesday, adding that the consortium’s ownership portion in BLI would be determined later in further discussions.
(Read also: Bumiputera too big to fail)
Bumiputera has been suffering from financial difficulties resulting from mounting liabilities and claim payments higher than its own assets and premium revenues.
The insurer’s capital stands at Rp 11.3 trillion (US$840.34 million), while its total liabilities were around Rp 29 trillion in 2015, which came from 6.5 million policy holders.
BLI was established because Bumiputera operates as a mutual insurance company, in which policy holders serve as shareholders thus preventing third-party investors from entering.
Didi said BLI had agreed to share 40 percent of its profit with Bumiputera.
To strengthen the insurer’s payment ability, a holding company named Bumiputera 1912 has been formed. It is wholly owned by Pacific Multi Investama, a subsidiary of publicly listed investment and textile company Evergreen Invesco. (hwa)
