A consortium led by Indonesian businessman Erick Thohir has agreed to invest IDR 2 trillion (US$149 million) into PT Bumiputera Life Insurance (BLI), a newly founded life insurer that will continue the business of the troubled Asuransi Jiwa Bersama Bumiputera 1912.
According to Bumiputera statutory management coordinator Didi Achdijat, the country’s Financial Services Authority (OJK) has already approved BLI’s insurance license, allowing it to begin operation in early 2017.
Didi, speaking to the Jakarta Post
, said that BLI has agreed to share 40% of its profits with Bumiputera. This is due to the original Bumiputera’s company structure. As a mutual insurer, the policyholders are the firm’s shareholders, preventing third-party investors from entering.
Bumiputera, which is over 100 years old, has encountered financial difficulties due to mounting liabilities and claims payments that exceed its own assets and premium income. It has close to 7 million policyholders, many of which are civil servants.
The OJK conducted a financial restructuring of the company in 2013, but it failed to solve the problem, leaving the company with IDR20 trillion (US$1.5 billion) in liabilities with only DR14 trillion (US$1.05 billion) in assets.
Thohir, 46, holds interests in media and sports. He founded Mahaka Media, which publishes Republika, an Indonesian daily newspaper, and Golf Digest Magazine. He is also co-owner of football teams Inter Milan in Italy and DC United in the USA.
The Thohir family is one of the most prominent families in Indonesian business. Teddy Thohir, Erick’s father, was co-founder of Astra International one of the country’s leading automakers. Meanwhile, Erick’s brother Garibaldi is the president and director of coal mining firm Adaro Energy.
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