Manulife Financial Corp. (00945.HK) has signed a 15-year bancassurance agreement with Singapore’s DBS Bank Ltd. that will allow the Canadian insurer to sell its products through the lender’s Asia network for US$1.2 billion.
The agreement gives Manulife access to the bank’s markets in Singapore, Hong Kong, mainland China and Indonesia to sell life and health insurance, the Hong Kong Economic Journal reported.
Manulife expects the benefits of the partnership will be reflected in its core earnings per share starting in 2017.
The deal, however, is likely to lower the insurer’s capital adequacy ratio by 10 basis points this year, with the initial cost of US$1.2 billion to be amortized over 15 years.
The four markets will provide the insurer with over 2,000 sales staff, 200 branches and six million clients from the bank’s retail, wealth management and SME banking businesses, according to a joint statement.
British insurer Aviva Plc will end its 14-year cooperation with DBS at the end of this year.
The collaboration contributed less than 3 percent of its new business value last year, Aviva said in a separate statement.
This article appeared in the Hong Kong Economic Journal on April 9.
Translation by Vey Wong
[Chinese version 中文版]
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