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May 12, 2022

Singapore’s Sea looking to enter Indonesian insurance market

Singapore-based technology firm Sea is planning to foray into the Indonesian insurance market, Financial Times reported citing sources. 

The technology firm has prepared a plan to acquire an insurance company in Indonesia, two sources told the publication. 

One of the sources said that Sea’s likely target is Asuransi Mega Pratama.

The deal would give Sea access to Indonesia’s general insurance market worth more than $5bn.

It would also enable Sea to step up competition with rival “super apps” such as Grab and GoTo, which already offer insurance via partners. 

Even Sea, in some markets, has partnered with insurers allowing them to offer coverage through its e-commerce platform. 

According to filings, earlier this year, Andy Indigo-backed firm acquired Asuransi Mega Pratama. 

Notably, Indigo holds an approximately 50% stake in Sea’s digital payments unit in Indonesia and co-invested in the acquisition of Bank Kesejahteraan Ekonomi in 2020.

Sea’s existing business ties with Indigo and his control over the insurer formed the base of talks of acquisition by Sea, one of the sources said.

Last year, Asuransi Mega Pratama is said to have reported an operating loss of $1.7m.

Sea, which has a market capitalisation of over $36bn, is still a lossmaking entity after listing in New York five years ago. 

Earlier this year, Sea founder and chair Forrest Li said that the firm’s digital financial services unit is expected to “achieve positive cash flow by next year”.

Later in April, the firm secured digital banking authorisation from Malaysian authorities, along with Grab and others.

Sea has operations across Asia, Europe and Latin America and it has been present in Indonesia since 2015.

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