(Bloomberg) -- Indonesian businessman Erick Thohir, whose investments have ranged from newspapers to sports teams in the U.S. and Europe, is now betting on life insurance.
A group led by Thohir plans to invest 2 trillion rupiah ($149 million) to gain full ownership of Asuransi Jiwa Bumiputera, a new unit of century-old mutual insurer AJB Bumiputera 1912, the insurance firm's statutory manager said Wednesday. He prevailed over Zurich Insurance Group AG and Samsung Life Insurance Co., which had also expressed interest in the Jakarta-based business, after its owners decided they didn't want to bring in foreign investors, AJB Bumiputera 1912 Coordinating Statutory Manager Didi Achdijat told reporters in Jakarta.
Asuransi Jiwa Bumiputera aims to start life insurance operations early next year after receiving the investment from Thohir's consortium, Statutory Manager Adhie Massardi said at the press conference Wednesday. AJB Bumiputera 1912, Indonesia's first national insurer owned by its customers, had been exploring options to raise at least $1 billion from a sale of its business to an overseas investor following a restructuring, people with knowledge of the matter said in October.
“The potential of the insurance industry in Indonesia is huge,” Agus Pramono, head of research at Jakarta-based PT Danareksa Securities, said by phone Thursday. “Insurance penetration in the country is still very low. The market leaders here are the foreign insurers, and there are many Japanese and European companies who want to enter Indonesia.”
A representative for Zurich Insurance declined to comment. A press official at Samsung Life said it had reviewed the possibility of investing in the Indonesian insurer before deciding not to proceed with an offer.
Inter Milan
For Thohir, a 46-year-old media mogul who co-owns the American soccer team D.C. United, venturing into uncharted territory is nothing new. That spirit is evident on his Twitter page where he writes, “it's kind of fun to do the impossible.”
The Indonesian businessman led a consortium in 2013 that took over FC Internazionale Milano SpA, known as Inter Milan. In June, Chinese retailer Suning Holdings Group Co. said it will buy 70 percent of the Italian soccer team for 270 million euros ($281 million), though Thohir's investor group will retain a 30 percent stake in the club and he will remain as its president.
He previously owned a stake in the Philadelphia 76ers, the U.S. professional basketball team, with others including actor Will Smith. Thohir is still an investor in D.C. United, the Major League Soccer team based in the U.S. capital.
Thohir founded PT Mahaka Media, which publishes Indonesia's Republika daily newspaper and Golf Digest magazine, in addition to broadcasting television and radio stations. The company employs more than 1,000 people, according to its website.
Wealthy Family
The dealmaker, who was named after Viking explorer Erik the Red, comes from a prominent wealthy family. His father, Teddy Thohir, was the co-founder of PT Astra International, one of the country's biggest automakers. Thohir's brother, Garibaldi Thohir, is the president director of coal miner PT Adaro Energy.
“Most of my investments is five to ten years, not just a year or two years,” Thohir said in a Bloomberg Television interview in 2013. “When I do other business, I want to be one of the best.”
The insurance industry's huge funding requirements could pose a challenge to Thohir, who will need to bring in industry experts to turn around Bumiputera's fortunes, according to Danareksa's Pramono.
“Thohir is a very well-regarded businessman in Indonesia, with a good track record of turning companies around,” Pramono said. “He is a good dealmaker and very well-connected.”
--With assistance from Hooyeon Kim Giles Broom and Alfred Liu To contact the reporters on this story: Joyce Koh in Singapore at jkoh38@bloomberg.net, Fathiya Dahrul in Jakarta at fdahrul@bloomberg.net. To contact the editors responsible for this story: Thomas Kutty Abraham at tabraham4@bloomberg.net, Ben Scent at bscent@bloomberg.net.
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