AXA and Bank Mandiri acquires general insurance business

AXA and Bank Mandiri will own 40% and 60% respectively in this start-up joint venture operation of Asuransi Dharma Bangsa.

In a release, AXA Asia announced the completion of its joint acquisition of Asuransi Dharma Bangsa with Bank Mandiri, Indonesia’s largest bank. AXA and Bank Mandiri will own 40% and 60% respectively in this start-up joint venture operation, with a paid-up capital of one hundred billion Rupiah. The new joint venture entity is named PT Mandiri AXA General Insurance and will begin operations on 1 November 2011.

PT Mandiri AXA General Insurance will leverage the strength of the existing AXA Mandiri brand. It will sell general insurance products to the customers of the Mandiri Group and introduce AXA’s general insurance expertise and innovation to the market.

Currently, the general insurance penetration rate in Indonesia, which is the ratio of gross premiums to GDP, is only 0.4% compared with other countries in ASEAN which are in the range of 1.6%. The gross premium of general insurance in Indonesia was only Rp23 trillion in 2009, and it is projected to grow by 22% per year until it reaches Rp63 trillion in 2014.

According to Mike Bishop, Chief Executive Officer of AXA Asia, “We are pleased to have achieved this milestone and look forward to further strengthening the position of AXA Mandiri in Indonesia. Our partnership with Bank Mandiri has been very successful since we formed AXA Mandiri Financial Services, a life insurance bancassurance business, in 2003. Today, AXA Mandiri Financial Services has become the largest bancassurance player in Indonesia, with a 40 per cent market share in this sector, with H1 2011 total premiums at Rp. 2.4 trillion and net profit was Rp.353.8 billion. We are confident that we can replicate this success in the new general insurance business. We intend to build a significant general insurance presence in high growth markets such as Indonesia, as a reaffirmation of AXA’s commitment to Asia.”