Prudential Buys Bancassurance Contract in Thailand From FWD -- Update
March 19 2020 - 6:01AM
Dow Jones News
By P.R. Venkat
A unit of Prudential PLC has entered into a 15-year
bancassurance agreement with Thailand's TMB Bank PCL, a transaction
valued at $754 million.
Under the deal, the U.K. insurer can sell its life-insurance
products through the networks of TMB and Thanachart Bank Public Co.
in Thailand starting in January 2021, Prudential and TMB said
separately Thursday.
The agreement means Prudential will replace FWD Life Insurance
Public Co. as TMB's bancassurance partner. FWD and TMB entered into
a 15-year bancassurance agreement in January 2017.
FWD Group, which is backed by Hong Kong billionaire Richard Li,
said it will receive $630 million from the sale.
The transition to Prudential is expected to be completed by end
of this year, and until then FWD will continue to offer its
products and services to TMB customers, FWD said.
"The new agreement significantly expands and extends Prudential'
s successful partnership with Thanachart Bank to TMB Bank, which,
following their merger, is the sixth-largest bank by deposits and
fourth-largest bank by branches in Thailand," Prudential said.
Long-term bancassurance agreements in Asia are very attractive
to foreign insurers as the region experiences a rise in the income
of middle-class citizens, many of whom are underinsured. These
agreements typically grant insurers exclusive rights to sell their
products.
Last year, FWD acquired Siam Commercial Bank PCL's life
insurance business for $3 billion. SCB is Thailand's largest
commercial bank by assets.
J.P. Morgan advised TMB Bank on the deal, while Prudential was
advised by HSBC.
Write to P.R. Venkat at venkat.pr@wsj.com
(END) Dow Jones Newswires
March 19, 2020 05:46 ET (09:46 GMT)
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