The Jakarta Post
Troubled state-owned insurer PT Asuransi Jiwasraya is seeing interest from four potential investors over the purchase of its subsidiary as it hopes to stay afloat after failing to pay out hundreds of millions dollars on customer policies that matured.
Jiwasraya president director Hexana Tri Sasongko said on Wednesday that the insurance company had received interest from four investors, both domestic and international, over the purchase of Jiwasraya Putra.
"We're currently in the last due diligence process with our potential investors," Hexana said after a hearing with the House of Representatives Commission VI overseeing state-owned enterprises. He declined to go into detail about the potential investors.
Jiwasaraya had yet to reveal the amount and value of the Jiwasraya Putra stake that would be offered to investors as the matter was still being finalized as of today, he added.
Four state-owned firms, pawnshop PT Pegadaian, train operator PT Kereta Api Indonesia, Bank Tabungan Negara (BTN) and Telkom subsidiary PT Telekomunikasi Seluler (Telkomsel), have committed to cooperating with Jiwasraya Putra to help the subsidiary sell insurance products to its customers.
"Jiwasraya Putra has its own captive market because we already have commitments with four other state-owned companies," Hexana said.
The sale of the subsidiary is also meant to help Jiwasraya pay for its policyholders' claims, which are projected to reach Rp 16 trillion (US$1.1 billion).
Another option that was being considered by the government to rescue Jiwasraya was the formation of a state holding company for state-owned insurers, which could inject fresh funds into the ailing state insurer, said State-Owned Enterprises Minister Erick Thohir.
“The most important thing is customer protection and measures that can provide a solution for customers, including one in March, will be taken. The most important thing is that customers will get certainty,” Erick told reporters.
An earlier plan was to establish a state holding company for state-owned insurers by February to kick start efforts to help Jiwasraya’s customers.
The case is now being investigated by the Attorney General’s Office and Supreme Audit Agency (BPK) for corruption allegations with a potential “systemic impact” on the nation’s financial industry, according to the BPK.