FWD revives talks for Thailand’s SCB Life

March 25 2019 by Andrew Tjaardstra

FWD Group has revived talks about a potential acquisition of the life insurance operations of Thailand’s Siam Commercial Bank.

SCB has reached a preliminary pact with FWD on a potential life-insurance partnership, the lender said in a Bangkok Stock Exchange filing on March 22.

Any deal would see FWD acquire SCB’s life insurance unit and sign a long-term distribution agreement with the bank.

A spokesperson for FWD Group told InsuranceAsia News: “We can confirm that FWD Group has entered into a memorandum of understanding with SCB to explore the possible acquisition of its life insurance business. As a pan-Asian insurer, we are always exploring opportunities to grow and develop the business. As any potential transaction has not yet been finalised, we will be making no further comments at this stage.”

SCB, Thailand’s biggest listed lender by assets, had explored a sale of its life insurance business in 2017 at an expected US$3 billion valuation, although this figure was thought to be a potential deal-breaker.

It held talks with potential buyers including AIA, FWD, Manulife and Prudential.

FWD already has more than 900,000 customers in Thailand where it also has a distribution agreement with TMB Bank.

If the deal goes ahead it could propel FWD into the top five life insurers in the country. Thailand has a competitive life market with AIA and Muang Thai Life among the leading players.

In October, FWD agreed to acquire Commonwealth Bank of Australia’s 80% stake in Indonesian life insurer Commonwealth Life for around A$426 million (US$300 million).

As part of the agreement, FWD is entering into a 15-year life insurance distribution partnership with CBA’s Indonesian banking business Bank Commonwealth. FWD will also contribute additional payments based on performance.