BANGKOK (Reuters) - Thailand’s Siam Commercial Bank Pcl (SCB) has entered into exclusive talks with Hong Kong-based insurer FWD Group for the sale of its life insurance business, nearly two years after previous talks broke off.
The memorandum of understanding for potential partnership in life insurance also involves a long-term product distribution pact, SCB CEO Arthid Nanthawithaya said in a statement on Friday.
The companies are in exclusive negotiations to finalize terms and agreements, SCB said, adding that the agreements were not binding and subject to approval. No financial details were given.
An FWD Group spokesman confirmed that the company was in talks with “SCB to explore the possible acquisition of its life insurance business”.
SCB and FWD were in talks two years ago about a potential $3 billion sale of SCB’s life insurance unit, SCB Life Assurance, but the talks failed on valuation disagreements, Reuters had reported.
FWD, owned by tycoon Richard Li, has been aggressively expanding its Asian footprint in the last couple of years, mainly through acquisitions as it seeks to grab a bigger share of the market from large global as well as local insurers. In August last year, it got regulatory approval to buy HSBC Holdings’ 49 percent stake in the London-headquartered lender’s Malaysian life insurance joint venture, HSBC Amanah Takaful Malaysia Bhd. FWD’s Asia presence includes Indonesia, Japan, Singapore, the Philippines, Thailand, and Vietnam. The company is also awaiting regulatory approval in China to launch a life insurance joint venture.
In 2018, SCB Life and FWD were ranked fifth and eighth, respectively, in terms of market share of total premiums in Thailand, according to Thai Life Assurance Association data.
SCB, Thailand’s second-largest bank by assets, signed a bancassurance deal last year with the Thai unit of UK-based Prudential Plc.
Reporting by Chayut Setboonsarng in Bangkok; Additional reporting by Sumeet Chatterjee in Hong Kong; Editing by Muralikumar Anantharaman