Speculation rife Manulife is bidding for Thai life insurer

by David Keelaghan24 Feb 2017
Manulife Financial are reported to be amongst a host of major players that are bidding for the life insurance arm of Thai institution Siam Commercial Bank. On Thursday, Bloomberg News reported that Manulife was one of multiple bidders for SCB Life, although the company has yet to comment on any acquisition.

Asian life insurance group AIA, Singapore’s Great Eastern Holdings, Hong Kong-based FWD Group and global giant Prudential are the other names attached to the deal, believed to be valued at close to $3 billion. This would represent one of the largest-ever acquisitions of a Southeast Asian insurer, and is further evidence of global insurers’ intention to expand their Asian presence.

In January, Allianz SE announced a 15-year agreement to distribute products through Standard Chartered outlets in Asia, while Sompo Holdings’ bancassurance agreement last year gave the Japanese firm access to CIMB Group branches in Southeast Asia.

Asia has been a vital part of Manulife’s business since it first started trading in Shanghai in 1897. Since then it has added operations in Hong Kong, Japan, Singapore, the Philippines, Thailand Malaysia, Indonesia, Taiwan, Vietnam, and most recently, Cambodia in 2012.

In its recent earnings results, the firm announced record insurance sales on the continent, which increased 27% on 2015’s levels. Core earnings for the Asian division stood at US$1,129 million for 2016, compared with US$963 million in 2015.

Addressing the results, Manulife Chief Financial Officer, Steve Roder revealed the source of the growth.

"In Asia, we achieved a 29% increase in APE (annual premium equivalent) sales compared to 2015, and a 35% increase in new business value, which speaks to the quality of sales we generated,” he said.

In 2016, Manulife Asia delivered record APE sales and NBV that was up 29% and 35%, respectively, compared with 2015.

APE sales for the year were US$2,498 million, an increase of 29%, with double-digit growth in all territories except for Japan and Thailand. That may go some way to explaining a possible deal for SCB Life, although Manulife is remaining reticent for the time being regarding any involvement it may have.

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