Thailand-based Siam Commercial Bank (SCB) has agreed to sell its entire stake in SCB Life Assurance to pan-Asian life insurer FWD Group Financial Services for THB92.7bn (£2.39bn).
Image: FWD to acquire SCB Life Assurance for £2.4bn. Photo: courtesy of The Siam Commercial Bank Public Company Limited.
Incorporated in 1976, the life assurance business involved in the deal began operations under the name Mahanakorn Life Insurance. In 2011, SCB acquired all the shares of the life assurance business held by New York Life International (NYLI) and PMCC (Thailand), and renamed it as SCB Life Assurance Public Company.
In addition to the sale, SCB has signed a distribution agreement to create a long-term life bancassurance partnership with the Hong Kong-based FWD, which will come into effect after closing of the deal.
Under the terms of the bancassurance agreement, the Thai bank will distribute FWD’s life insurance products to its customers in Thailand by utilising its distribution channels for a period of 15 years. SCB will also be entitled to additional payments emerging from bancassurance transactions over the course of the partnership.
The partnership is expected to bring together SCB’s customer base and distribution network with FWD’s product propositions and digital capabilities to provide superior life insurance products and improved digital experiences to customers.
FWD Group CEO Huynh Thanh Phong said: “SCB is a leading bank in Thailand, with an extensive presence and deep local experience. We are fully committed to working with SCB and growing our business in Thailand.
“We are confident about our product capabilities and we are well aware of the needs and preferences of Thai banking customers. Through this collaboration, we will bring our combined product and digital capabilities to help customers achieve their financial goals and aspirations.”
FWD said that SCB Life’s customers will not be impacted by the transfer of ownership to FWD upon completion of the deal. The customers will continue to get protections, benefits and customer services as per the terms of their policies.
In addition, all the existing SCB Life policies will continue to be honoured by the Hong Kong firm after completion of the transaction.
SCB CEO and executive committee chairman Arthid Nanthawithaya said: “The bancassurance business remains a key long-term strategic priority for us. The establishment of this partnership with FWD will help create significant long-term value for our customers, shareholders, employees, and other key stakeholders, bringing together the unique strengths of both SCB and FWD.
“In addition, FWD, as a leading regional insurer with best-in-class customer propositions, strong digital capabilities, and a highly experienced management team, shares our long-term growth aspirations for the life insurance business in Thailand and the value of customer-centricity, which underscore our commitment to clients and this partnership.”
The transaction, which will be subject to receipt of regulatory approvals and approval by the bank’s shareholders among other conditions, is slated to be wrapped up in the latter part of this year.
In June 2019, FWD signed a deal to acquire the Hong Kong insurance business of MetLife to further boost its market share in the region.