Singapore-headquartered DBS Bank and Manulife Financial Asia have entered into a 15-year regional distribution agreement covering Singapore, Hong Kong, China and Indonesia.
The agreement, which becomes effective on 1 January 2016, means DBS’s customer base will gain access to Manulife’s life and health insurance products through the bank’s network of over 200 branches and its sales force of over 2,000 professionals, as well as via its internet and mobile banking platforms.
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Leading to the agreement with Manulife, DBS conducted a thorough insurance partner selection process, which attracted strong interest from a number of leading regional and multinational insurers.
The process considered a number of factors, including customer focus, expertise, execution track record and potential for long term value creation.
Under the agreement, there will be an initial payment by Manulife to DBS of US$1.2bn, which Manulife intends to fund with internal resources.
This payment will be amortised by both parties over 15 years. There will also be ongoing, variable payments, which are based on the success of the partnership, and Manulife expects the agreement to be accretive to Core EPS in 2017.
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By GlobalDataThe initial payment for this regional agreement is expected to reduce Manulife’s regulatory capital ratio by 10 points on or before 1 January 2016.
Commenting on the partnership, DBS CEO Piyush Gupta said: "Bancassurance is a key focus for DBS and an important part of our overall customer value proposition."
