By Andrew Tjaardstra, Insurance Asia News | October 23, 2018
FWD Group has agreed to acquire Commonwealth Bank of Australia’s 80% stake in Indonesian life insurer PT Commonwealth Life for around A$426 million (US$300 million).
As part of the agreement FWD will enter into a 15-year life insurance distribution partnership with CBA’s Indonesian banking business PT Bank Commonwealth. FWD will also contribute additional payments based on performance.
Huynh Thanh Phong, FWD’s group chief executive, commented, “This is another exciting milestone in our journey to become a leading pan-Asian insurer that changes the way people feel about insurance.”
“This acquisition will complement our existing business in Indonesia, providing new opportunities to continue to build our customer-led technology-driven strategy to embrace the enormous long-term growth potential in the Indonesian insurance market.”
FWD first entered the Indonesian market through PT FWD Life Indonesia, a joint-venture insurance company launched in 2015.
When the transaction is completed FWD plans to rename and rebrand the business and to honour all existing policyholders; meanwhile it is business as usual.
The move is part of a recent pattern of selling life insurance assets by CBA; it has agreed to sell its businesses in Australia and New Zealand to AIA, and its stake in China’s BoComm to Mitsui Sumitimo. CBA expects a post tax gain of A$140 million from the Indonesian sale.