Acceleration of strategy with addition of a scale life insurance platform to complement Prudential’s strong asset management position
HONG KONG, CHINA – Media
OutReach – 19 March 2020 – Prudential Life Assurance
(Thailand) Public Company Limited (“Prudential Thailand”), a subsidiary of
Prudential plc, is pleased to announce it has entered into a strategic bancassurance
partnership with TMB Bank Public Company Limited (“TMB”) with an initial term
of 15 years to provide Prudential’s leading suite of health and wealth
solutions to TMB’s large and growing customer base.
The new agreement
significantly expands and extends Prudential’s successful partnership with
Thanachart Bank to TMB Bank, which, following their merger, is the sixth
largest bank by deposits and fourth largest bank by branches in Thailand.
Thailand is the
second largest life insurance market and the largest mutual fund market in ASEAN,and
has significant growth potential. The bancassurance partnership strongly complements
Prudential’s top-five market position in the mutual fund market. It also deepens the strong relationship with
TMB established through Prudential’s joint venture asset management partnerships¹,
where Prudential has a 12 per cent share² of the Thai mutual fund market. Together,
both partners now have a high-quality platform to deliver best-in-class,
holistic health and wealth solutions to 9 million TMB customers equivalent to 17
per cent of the country’s adult population³.
The new strategic
partnership with TMB enables Prudential Thailand to achieve the scale and
presence in the life insurance market, consistent with its ambition of being a
leading player. It is also strongly aligned with TMB’s own aspirations of being
a partner in its customers’ lives in providing a suite of insurance solutions
and digital services.
Nic
Nicandrou, Chief Executive of Prudential Corporation Asia, said, “We
are delighted to enter into a long-term strategic life insurance partnership
with TMB, further complementing our asset management relationships in Thailand.
This partnership combines TMB’s unrivalled local market knowledge and reach
with Prudential’s significant expertise in life, health and savings
solutions. It will provide Thais with access
to a fast growing and expanding digital platform and best-in-class holistic
solutions to both protect their families and grow their wealth. We are also delighted
to contribute to Thailand’s economic and social development by investing in
local capital markets and by creating significant employment opportunities.”
Piti
Tantakasem, Chief Executive of TMB,
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. At the heart of this partnership is a shared commitment to
making a difference in our customers’ lives by addressing their unique needs,
ultimately enhancing their financial wellbeing and supporting the country’s
sustainable development.”
The extended exclusive partnership agreement
will commence on 1 January 2021 and until this time the current arrangement
with Thanachart Bank will continue. This agreement requires the novation of TMB
Bank’s current bancassurance distribution agreement with another insurance group. The change in arrangements will cost Thai Baht
24.5 billion (equivalent to USD 754 million based on exchange rate at 18 March
2020) which will be paid in two instalments, with Thai Baht 12.0 billion due in April 2020
and the remainder on 1 January 2021. The funding for this transaction will
utilise a mixture of Prudential Asia’s existing resources and Prudential plc
own resources, potentially also including new debt. In line with the Group’s
policy, the amounts described above will be capitalised as an intangible asset
representing distribution rights.
Footnote
Sources: Association of Investment Management Companies, International
Monetary Fund, Swiss Re, United Nations
¹In December 2019 Eastspring
Investments acquired 50.1 per cent of Thanachart Fund (with Thanachart Bank, a
wholly-owned subsidiary of TMB, holding the remaining 49.9 per cent). In
September 2018 Eastspring acquired a 65 per cent stake in TMB Asset Management
(now known as TMBAM Eastspring).
² As at 31 December 2019 with assets under management of
Thai Baht 667 billion (USD 21 billion).
³ Estimated Thai population aged 20 years and above as at
2020.
⁴ As at 31 December 2019.
⁵ Life Weighted Premium represents new and renewal regular
premium plus 10 per cent of single premium.
About Prudential plc
Prudential plc is an Asia-led portfolio of
businesses focused on structural growth markets. The business helps individuals
to de-risk their lives and deal with their biggest financial concerns through
life and health insurance, and retirement and asset management solutions.
Prudential plc has 20 million customers and is listed on stock exchanges in
London, Hong Kong, Singapore and New York. Prudential plc is not affiliated in
any manner with Prudential Financial, Inc., a company whose principal place of
business is in the United States of America, nor with the Prudential Assurance
Company, a subsidiary of M&G plc, a company incorporated in the United
Kingdom.
About Prudential in Thailand
Prudential has operated in Thailand for more
than 24 years through Prudential Life Assurance (Thailand) Public Company Limited. Prudential serves more than 1.6 million customers in Thailand and manages
more than Thai Baht 112 billion of assets on their behalf⁴. In 2019 the Thailand business grew IFRS
operating profits by 8 per cent to USD 170 million and Life Weighted Premium by
8 per cent to USD 619 million⁵.
About TMB / Thanachart Bank
TMB is a market leader in deposits and
digital banking while Thanachart Bank is a market leader in retail lending,
particularly in the auto hire purchase segment where is ranked No.1 in the Thai
market. After the successful merger with Thanachart Bank, TMB’s operational
scale has doubled in size with total assets of Thai Baht 1.9 trillion and is
now the 6th largest bank in Thailand. TMB, together with Thanachart Bank, has a
combined branch network of over 900 branches nationwide and a customer base
more than 9 million.
