(Reuters) - U.S.-based Prudential Financial Inc has entered the Indonesian life insurance market in a joint venture with a unit of CT Corp in Jakarta, the companies said on Tuesday.
Prudential’s Pruco Life Insurance Company unit has acquired a 49 percent stake in PT Asuransi Jiwa Mega Indonesia, the life insurance subsidiary of Indonesia-based CT Corp, the companies said in a statement. Financial terms were not disclosed.
The deal presents Newark, New Jersey-based Prudential Financial with an opportunity to tap the expanding middle class of Indonesia, the world’s fourth-largest country by population.
Prudential Financial, which managed more than $1 trillion in assets as of March 31, already does business in 40 countries, including Japan, South Korea, Taiwan and China, the company said.
“The partnership advances our business growth strategy by expanding PFI’s international footprint into an attractive market with long-term growth potential,” Charles Lowrey, chief operating officer of Prudential’s international businesses, said in a statement.
CT Corp is an Indonesian holding company whose businesses include Bank Mega and other financial services institutions. It manages more than $10 billion in assets, it said.
“The need for life insurance is increasing as disposable income, life expectancy and financial literacy improves in Indonesia,” said Chairul Tanjung, CT Corp’s chairman and founder.
Average life expectancy in Indonesia increased to 68.9 years in 2014 from 64.7 years in 1994, according to United Nations data.
Life insurance premiums in Indonesia are projected to increase at a compound annual growth rate of 13 percent between 2015 and 2020, the companies said, citing industry data. Still, the number of Indonesians who buy life insurance is small. Premiums underwritten represent 1.3 percent of the country’s gross domestic product, they said.
Prudential and CT Corp said they finalized the joint venture on July 3.
Reporting by Suzanne Barlyn in New York; Editing by Matthew Lewis