UOB, Prudential form bancassurance venture

MANILA, Philippines - Singapore’s United Overseas Bank and Prudential Corp. Asia have set up a regional bancassurance partnership, whereby Prudential will sell its insurance products through UOB’s retail network.

UOB will sell UOB Life Assurance to Prudential for a total consideration of S$428 million ($306 million). HSBC advised UOB on the transaction, while Citi advised Prudential.

UOB in Singapore and its subsidiaries in Indonesia and Thailand — UOB Buana and UOB (Thai) — will distribute Prudential’s life, accident and health insurance products for an initial term of 12 years.

The insurer chose to partner with UOB due to the latter’s scope and scale of operations in the region. The bank is one of the largest in Southeast Asia, with more than 400 bank branches across the three markets.

Moreover, in Indonesia and Singapore, Prudential’s distribution is agency driven.

For example, it has 85,000 tied agents in Indonesia, although it also has bank and non-bank distribution channels. The firm is a top-three player in the Indonesian and Singaporean life insurance markets by annual premium equivalent, and the agreement will further boost its distribution capabilities with a very strong bank network.

There have been other bancassurance tie-ups in the region in recent months.

In late December, Mumbai-based IndiaFirst, a life insurance joint venture with a bancassurance model, was set up by Bank of Baroda, Andhara Bank and the UK’s Legal & General.

And in November, industry leasder Philippine American Life and General Insurance Co. (Philamlife) and the Bank of the Philippine Islands (BPI) formed a strategic life-assurance joint venture through the sale of BPI’s 51-percent stake in Ayala Life Assurance. The joint venture has been renamed BPI-Philamlife Assurance Corp.