IPO Abroad
Hanwha Life Insurance Indonesia is planned to go public. The idea is to increase its presence in the Indonesian insurance market, which is showing a double-digit annual growth these days. To this end, the company held a press meeting in Jakarta on April 5, saying that it would go public in 2020 after increasing its premium income by 93% this year, hiring more insurance planners, increasing the number of its stores and releasing new products including bancassurance products.
The decision is to reduce the number of the headquarters’ shares in the local subsidiary, too. Back in 2012, Hanwha Life Insurance set up the local subsidiary by acquiring shares from local insurer Multicor. Hanwha Life Insurance acquired 80% of its shares at that time but the South Korean insurer’s current shareholding ratio amounts to 98% as a result of additional investment and so on. At present, a non-Indonesian entity cannot have more than 80% of an Indonesian insurer according to local regulations recently tightened by the local financial authorities and, as such, Hanwha Life Insurance has to lower the ratio.
The South Korean insurer reached a conclusion that IPO is the most effective way to do so. For an insurer to go public in Indonesia, it is required to have had a gain in each of the two previous years. Hanwha Life Insurance Indonesia, meanwhile, has been in the red since its establishment in 2013. However, it can show some substantial growth this year and comply with the regulations at the same time if it strives for the goal of IPO.
“We are aiming to join the top 10 in the Indonesian insurance market,” the company explained, adding, “In this context, we will increase the number of our planners by approximately 1,300 to 4,631 within this year and increase the number of our stores by six to 18 during the same period and then to 30 until the IPO.” For this purpose, Hanwha Life Insurance already increased the capital of the subsidiary by 151.3 billion won (US$136 million) late last year.