Japan's Sumitomo Life Insurance Co to acquire stake in life insurance unit of Bank Negara Indonesia

December 2
3:04 AM 2013

Japan-based Sumitomo Life Insurance Co said it would be purchasing a stake in the life insurance arm of Bank Negara Indonesia or BNI. A statement found on the insurance company's website revealed that the fourth-largest life insurer in Japan will be paying JPY 36.2 billion or USD 354 million for a 40% stake in the unit. The statement also said BNI Life Insurance will be issuing new shares to Sumitomo Life, an Osaka-based firm.

Last December, Sumitomo Life also disclosed that it would be purchasing an 18% stake in Bao Viet Holdings, the largest insurance firm in Vietnam, from HSBC Holdings. The deal was worth USD 336 million.

According to a Bloomberg report, insurance firms in Japan like Sumitomo Life and rival Dai-ichi Life Insurance Co are attracted to the promising outlook of Southeast Asia as Japan battles an aging and shrinking population. Data gathered by Bloomberg show that a total of USD 7.6 billion insurance deals have been made in Southeast Asia since the beginning of last year. This compared with the USD 3.6 billion made from 2009 to 2011. There are 10 member nations that comprise the Association of Southeast Asian Nations. These include Brunei, Cambodia, Thailand, Indonesia, Singapore, the Philippines, Laos, Malaysia, Myanmar and Vietnam.

Citing data from the United Nations, the report said Japan's population as of 2010 reached 127 million. It is the oldest population in the world and is estimated to shrink 17% by 2055, which represents the fastest decline among the world's developed economies.

In June Dai-ichi Life also said it would also be purchasing a 40% stake in the life insurance arm of Panin Financial in a deal worth USD 278 million. Moreover, Dai-ichi Life Managing Executive Officer Hideo Teramoto told Bloomberg in May that Japan's largest publicly-traded life insurance firm intends to spend USD 3 billion for acquisitions abroad in the next two years.

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