AIA Group Ltd., Prudential Plc. and Manulife Financial Corp. have been shortlisted as a potential insurance partner of Singapore banking group DBS in a distribution deal worth US$1.5 billion.
The bancassurance deal gives the chosen partner the exclusive right to distribute DBS products for 15 years, Reuters reported Thursday.
Aviva Plc., the current DBS partner, is also on the shortlist, but it was not immediately clear when the final selection would be made.
DBS will partner with only one insurer for all its Asian markets but it is keen to create competition in the process and have flexibility, the report said.
The shortlisting of Canada’s Sun Life Financial Inc., Richard Li’s Hong Kong-based insurer FWD Insurance and Metlife Inc., which have submitted bids only for smaller markets, reflects that strategy, people familiar with the matter were quoted as saying.
Singapore and Hong Kong, two of the bank’s strongest markets, are seen as profitable for insurers due to their status as Asia’s main wealth management centers and their aging populations. DBS also operates in India, Indonesia and Taiwan.
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.
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