The joint venture, in which each entity will have a 50% stake, will be named Astra Aviva Life, and is expected it to be launched "later this year", subject to regulatory approval.
Astra Aviva Life will also enter into distribution arrangements with a number of the Astra group of companies, including PermataBank, following the requisite approvals.
PermataBank counts itself among the top 10 Indonesian banks and was formed by the merger of five banks – Bank Bali, Bank Universal, Bank Prima Express, Bank Artamedia and Bank Patriot in 2002.
Mark Wilson, group chief executive of Aviva, said: “Astra is a hugely respected household name in Indonesia and the ideal partner for Aviva in one of the world’s fastest growing insurance markets. This joint venture creates a compelling growth opportunity, underlines our commitment to Asia and supports our strategy of cash flow plus growth.”
Astra Aviva Life will be "the preferred provider" of a range of life insurance products to Astra and its subsidiaries, while it will also offer life insurance to the wider consumer market through a variety of digital, agency and partner channels, the companies said.
Prijono Sugiarto, president director of Astra International, said: “Leveraging Aviva’s insurance expertise, Astra Aviva Life aims to create significant long-term value for its customers, employees and stakeholders.
“This joint venture is in line with Astra’s strategy to continue to expand and diversify, entering new business areas in which we believe we can create a market-leading business underpinned by our values and management philosophy.”
In July, International Adviser reported the insurance company is in talks with Astra for a foray into Indonesia.
Established in 1957, Astra serves more than 10m customers per year through businesses in six sectors namely automotive, financial services, heavy equipment & mining, agribusiness, infrastructure & logistics, and information technology. Astra consists of 179 companies including subsidiaries, associates and jointly controlled entities and employs more than 197,000 people across Indonesia.
Aviva provides life, general and health insurance and asset management services to 34m customers worldwide, managing assets worth £311bn (US$494bn) assets under management and operates in 17 markets internationally.
