Bank Rakyat Indonesia (BRI) has invited about six companies to bid for a stake in its insurance unit that will be worth $600m.
Some of the bidders for the 40% stake in the unit include BNP Paribas Cardif, Japan’s Tokio Marine Holdings, Belgium-based insurer Ageas SA and South Korea-based Hanwha Life Insurance, reported Reuters.
Bloomberg had reported that the buyer will also be allowed to sell products through Bank Rakyat’s 10,000 outlets across Indonesia.
The bank earlier chose JP Morgan to help it sell a stake in BRIngin Life.
The official bidding is expected to take place in July and the bank plans to complete the transaction by the end of the year.
Indonesia’s insurance sector is seen as a fast emerging market with a growing interest from foreign investors.
According to data from Credit Suisse, Indonesia was Asia’s 10th largest insurance market in 2013 earning a total premium income of $18.6bn. It has been estimated that life insurance that forms 80% of the total market will grow at a rate of 13% this year.
Established in 1895, BRI is Indonesia’s second largest bank by assets. Currently, 70% of the bank is owned by the government.
Reuters quoted sources as saying that France’s Cardif was being seen as a strong contender after it lost a bid for a 40% stake in the life insurance unit of PT Bank Negara Indonesia around two years ago.
Image: The bid for a 40% stake in BRI’s insurance unit is expected to raise $600m. Photo: courtesy of Kittisak/freedigitalphotos.net.