Indonesian state-owned insurer PT Asuransi Jiwasraya is in discussions with potential investors over the purchase of its subsidiary, as the company struggles to meet its financial obligations to its customers.
Hexana Tri Sasongko, president director of Jiwasraya, said that four investors, both local and foreign, have expressed interest in purchasing its subsidiary Jiwasraya Putra, the Jakarta Post reported. He did not reveal the amount and value of the potential transaction, as these are still being finalised. The names of the investors were also kept confidential.
According to the report, four state-owned businesses, namely pawnshop PT Pegadaian, railway operator PT Kereta Api Indonesia, Bank Tabungan Negara (BTN), and telecommunications firm PT Telekomunikasi Seluler, have partnered with Jiwasraya Putra to sell insurance products to their customers.
“Jiwasraya Putra has its own captive market because we already have commitments with four other state-owned companies,” Hexana was quoted as saying in the report.
If the sale is successful, it will help Jiwasraya to pay out its customers’ claims, which could amount to IDR16 trillion (US$1.1 billion).
Jiwasraya’s financial troubles are being blamed on alleged mismanagement and corruption by its former executives. The case is being investigated by the Attorney General’s Office and the Supreme Audit Agency, with several arrests having been made.
