BANGKOK -- British insurer Prudential said it has reached an exclusive deal to sell life insurance products through TMB Bank, Thailand's sixth largest lender.
The 24.5-billion-baht ($750 million) deal was signed between Prudential and Hong Kong's FWD Group Financial Services. The British insurer will pay 12 billion baht by April, and the remainder on Jan. 1, 2021.
The initial term for the exclusive rights will start on Jan. 1 and last for 15 years. The parties agreed to set April to December 2020 as the transition period. TMB Bank will continue selling FWD bancassurance products, while onboarding Prudential's products.
Prudential already has an exclusive bancassurance selling deal with Thanachart Bank, which is in the process of merging with TMB Bank. The entire consolidation is expected to be completed by mid-2021.
The merged bank will still be the sixth largest after Bank of Ayudhya, a Thai subsidiary of Japan's Mitsubishi-UFJ Financial Group. Its fourth largest branch network will help Prudential reach more customers in Southeast Asia's second largest life insurance market.
The deal will further strengthen ties between TMB Bank, Thanachart Bank and Prudential, as the British insurer has already teamed up with TMB Bank in asset management.
In September 2018, the British insurer's arm Eastspring Investments acquired 65% of the shares in TMB Asset Management. Thailand is the largest mutual fund market in Southeast Asia. In December 2019, Eastspring also acquired 50.1% of Thanachart Fund.
"This partnership combines TMB's unrivaled local market knowledge and reach with Prudential's significant expertise in life, health, and savings solutions," said Nic Nicandrou, chief executive of Prudential Corporation Asia.
TMB Chief Executive Piti Tantakasem said: "We look forward to taking our life insurance business to the next level with Prudential Thailand, as we provide innovative offerings to customers across the country."
Before selling its exclusive deal with TMB, FWD had secured its own channel to access the kingdom's growing insurance market.
The Hong Kong insurer controlled by Richard Li, the youngest son of property billionaire Li Ka-shing, had acquired the life insurance business of Thailand's third largest bank Siam Commercial Bank for 92.7 billion baht after nearly four months of negotiations. The acquisition was one of the largest ever made in the region.
SCB Life Assurance ranks fourth in market share behind Muang Thai Life Assurance, Hong Kong-based Thai Life Insurance, and Krungthai-AXA Life.