DBS shortlists AIA, Prudential for $1.5b deal

AIA, among insurance firms shortlisted for DBS deal

AIA Group Ltd, Prudential plc and Manulife Financial Corp are among firms shortlisted to become DBS’ insurance partner in a bank distribution deal worth around $1.5 billion, a report said.

DBS’s bancassurance deal is the last major agreement of this kind available for insurers keen to tap into Asia’s fast-growing insurance market. The deal will have DBS distribute products exclusively of the chosen partner over 15 years.

The Singapore banking group’s current partner Aviva plc has also been shortlisted for the agreement that starts next year, a Reuters report said quoting sources.

Late last year, DBS hired Morgan Stanley to advise on the deal. It was not immediately clear when DBS would complete the selection of its insurance partner.

It was reported that DBS is keen to partner with just one insurer for all the Asian markets it operates in, but to create competition in the process and have flexibility, it has also shortlisted Canada’s Sun Life Financial Inc, Hong Kong-based insurer FWD Insurance and Metlife Inc, who have submitted bids only for smaller markets.

FWD Insurance is run by tycoon Li Ka-Shing’s business man son Richard Li.

DBS and all of the insurers declined to comment, the Reuters report by Denny Thomas from Hong Kong added.

The so-called bancassurance model – as opposed to the traditional agency model – is lucrative for commercial banks in Asia because global insurers are willing to pay hefty fees for access to lenders’ branch networks.

Insurers value the deals because they offer exclusive access to banks’ large branch networks across Asia and the opportunity to sell to the bank’s customers inside the branches.

Asia’s largest retail banking networks belong to Citi, HSBC and Standard Chartered, but those deals have already been locked up, leaving DBS as the last major partner available to insurers.

Singapore and Hong Kong, being two of DBS’s strongest markets, are seen as profitable for insurers as they are Asia’s main wealth management centers with aging populations. DBS also operates in India, Indonesia and Taiwan.

DBS’s planned deal comes after AIA struck a 15-year exclusive deal with Citibank in Asia, for which AIA said it paid an $800 million upfront payment.

Prudential renewed last year a 15-year agreement with StanChart for $1.25 billion. HSBC signed a 10-year deal with Germany’s Allianz SE in 2012.

Related stories:

DBS, Societe Generale jointly bid for Coutts

DBS completes purchase of SocGen’s Asia unit

 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.