FWD in Thai insurer deal

Business | Reuters and Stella Zhai 2 Jul 2019

Reuters and Stella Zhai

Insurer FWD Group, backed by Richard Li Tzar-kai, younger son of tycoon Li Ka-shing, is buying the life assurance business of Siam Commercial Bank, Thailand's largest lender by assets, for 92.7 billion baht (HK$23.71 billion), marking the largest insurance M&A deal in southeast Asia.

"SCB will distribute FWD's life insurance products to its customers in Thailand, leveraging the bank's distribution channels for a period of 15 years," the companies said in a joint statement yesterday.

SCB will receive additional payments common in bancassurance transactions over the course of the partnership.

The firms revived talks in March, two years after they failed to reach a deal over disagreements on valuation.

The deal is expected to be completed late this year, subject to regulatory approvals and approval by the bank's shareholders, said FWD.

SCB Life's customers will not be affected by the transfer of ownership to FWD and will continue to receive protections, benefits and customer services in accordance with the terms of their policies and all existing SCB life policies will be maintained by FWD.

The Thailand insurer recorded its new business value surged 67 percent to 14 billion baht in 2018.

"SCB is a leading bank in Thailand, with an extensive presence and deep local experience," said Huynh Thanh-phong, chief executive of FWD Group, adding that FWD will bring its combined product and digital capabilities to help customers achieve their financial goals and aspirations.

FWD reported its new business value in 2018 rose 35 percent year on year, compared with a 22 percent growth of its competitor AIA Group (1299).

The insurer is also awaiting regulatory approval in China to launch a life insurance joint venture.

The latest deal comes days after FWD agreed to buy the Hong Kong operations of a United States insurer MetLife.

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