PT Bank Central Asia Tbk (IDX:BBCA) is considering strategic options for its life insurance unit including a potential stake sale, according to two sources with knowledge of the matter. The Jakarta-listed lender, which has a market value of $74 billion as of June 19, 2023, is working with an adviser on a strategic review of PT Asuransi Jiwa BCA, also known as BCA Life, the sources said. Other options under consideration include establishing a joint venture with a foreign partner or a bancassurance partnership where an insurer can sell its products and services in a lender's branches for a period of time, the sources added, declining to be named as the process is private.

A spokesperson for the bank declined to confirm or deny the developments. Reuters could not immediately ascertain the potential size of any stake to be sold or how much the unit would be valued at in such a deal. BCA Life had total assets worth IDR 2.34 trillion ($156.08 million) as of December 2022.

The sources said deliberations are at an early stage and no final decision has been made. “In principle, BCA and its subsidiaries are always open to collaborate with strategic partners to expand our services, while supporting business growth,” BCA spokesperson Hera Haryn said. She added many industry players were interested in taking advantage of Indonesia's potentially large life insurance market.

A potential deal could see BCA joining a list of lenders and insurers in Asia seeking tie-ups for their insurance subsidiaries. These include India's Kotak Mahindra Bank that is in talks to sell a stake in its general insurance unit to Zurich Insurance Group and Japanese insurer Tokio Marine Holdings tapping investment banks to work on a sale of its Southeast Asia life insurance business, Reuters has reported.