Prudential Buys Bancassurance Contract in Thailand From FWD -- Update

   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 [e-mail]

(END) Dow Jones Newswires

March 19, 2020 05:46 ET (09:46 GMT)

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