Thai bank’s $3bn insurance unit sale breaks down

Thai bank’s $3bn insurance unit sale breaks down | Insurance Business

Thai bank’s $3bn insurance unit sale breaks down
Siam Commercial Bank (SCB) of Thailand’s plan to sell its insurance unit SCB Life Assurance has ended in failure, as it was unable to agree on a suitable valuation with potential buyer FWD Group of Hong Kong, sources said.

The transaction was estimated to have been worth around US$3 billion had it succeeded. According to Thompson Reuters data, it could’ve been the largest insurance M&A deal in the Southeast Asian region, and the biggest in Asia since 2016.

A source told Reuters that there were also differences on how to use SCB’s expansive network of branches to sell insurance products, contributing to the stalling of the deal. No announcement has been made whether SCB would try to sell the insurer again.

Bancassurance, which is a tie-up that leverages a bank’s branch networks to distribute insurance products, is gaining popularity in Asia over the traditional agent-based model in reaching the fast-growing insurance market.

SCB Life Assurance is one of the top insurers in Thailand, thanks to its parent bank’s wide reach. Its net premium earning for 2016 was THB48 billion (US$1.41 billion), while net profit was at THB5.8 billion (US$170.19 million).

Aside from FWD, several other insurance juggernauts such as AIA, Manulife, and Prudential were reported to be interested in SCB Life Assurance.


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