By Rick Carew
HONG KONG-- Manulife Financial Corp. is near a multiyear deal
worth over $1 billion that will allow the Canadian firm to
exclusively distribute its insurance products through Singaporean
lender DBS Group Holdings Ltd.'s branches across Asia, according to
people familiar with the situation.
The deal with DBS, expected to be signed late Wednesday, is the
latest by a global insurer seeking access to one of the world's
fastest-growing life insurance markets. Banks across Asia have been
fetching high prices for multiyear exclusive access to their branch
networks, giving insurers a way to increase their sales quickly in
the region.
Prudential PLC last year renewed a distribution partnership with
Standard Chartered PLC. That followed AIA Group Ltd. and Citigroup
Inc. inking a multibillion-dollar deal for AIA to distribute its
insurance products through Citigroup's Asian-Pacific retail branch
network in late 2013. HSBC Holdings PLC sells its own insurance
products through its banking network.
The terms of the DBS deal include a one-time, upfront payment
from Toronto-based Manulife worth slightly more than $1 billion to
DBS, with additional variable payments to be made based on the
performance of the partnership, one of the people familiar with the
said. The agreement is known as a bancassurance deal, which means
the insurance products are distributed through a bank's branch
network rather than through individual insurance agents.
The duration of the agreement would be the industry standard
15-year contract. Manulife previously had cooperated with DBS in
the Hong Kong, Singapore and Indonesia markets.
A spokesman for Manulife declined to comment. A spokeswoman for
DBS Group didn't reply to a request for comment.
Manulife is taking over from U.K. insurer Aviva PLC, which was
previously the primary distributor of insurance products via the
DBS network across Asia. The contract between Aviva and DBS wasn't
renewed, although Aviva participated in the bidding process for the
new contract, a person familiar with the situation said.
Global insurers are eager to grow their sales across Asia as
penetration rates for insurance products remain low relative to
more mature markets. Manulife currently operates across 12 markets
in Asia and has more than 57,800 agents in the region, according to
its annual report. Manulife's Asia operations recorded $1.3 billion
in insurance sales last year, an increase of 31% over its 2013
insurance sales, which totaled just over $1 billion.
Asia accounted for 18% of Manulife's total premiums and deposits
last year and 13% of its total assets under management, according
to its annual report.
Write to Rick Carew at rick.carew@wsj.com
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