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Prudential PLC PRU Prudential - Thanachart Bancassurance Partnership



  Prudential PLC (PRU) - Prudential - Thanachart Bancassurance Partnership

RNS Number : 2789Q
Prudential PLC
05 November 2012
 



 

5 November 2012

 

   Prudential plc and Thanachart Bank PCL enter into a long-term exclusive
bancassurance partnership in Thailand and Prudential acquires Thanachart Life
                              Assurance Company

 

Prudential  plc  ("Prudential"),  through   its  subsidiary  Prudential   Life 
Assurance (Thailand)  Public  Company  Limited  ("Prudential  Thailand"),  and 
Thanachart Bank Public Company Limited ("Thanachart Bank") have today  entered 
into an agreement  to establish  an exclusive 15-year  partnership to  develop 
jointly their  bancassurance business  in  Thailand. In  addition,  Prudential 
Thailand will  acquire  100 per  cent  of Thanachart  Life  Assurance  Company 
Limited ("Thanachart  Life"),  a  wholly-owned life  insurance  subsidiary  of 
Thanachart Bank. The consideration  for Thanachart Life  is £358 million  (THB 
17.5 billion) settled  in cash on  completion, with a  further payment of  £10 
million (THB 0.5  billion) payable 12  months after completion,  subject to  a 
post-completion adjustment to reflect the net asset value as at the completion
date. The transaction  is subject to  regulatory approval and  is expected  to 
close in the first quarter of 2013.

 

This transaction builds  on Prudential's  strategy of focusing  on the  highly 
attractive markets of  South East  Asia. Thailand's life  insurance market  is 
significant in size,  comparable in  premium terms  to each  of Indonesia  and 
Malaysia^1. Life insurance penetration in Thailand remains low at only 2.7 per
cent^1 providing substantial long-term profitable growth opportunities. Market
gross premium income increased  at a 16 per  cent compound annual growth  rate 
between 2007 and 2011^1. Bancassurance has been the main driver of growth over
this period, accounting for 50 per cent of life insurance first year  premiums 
in 2011, compared to 28 per cent in 2007^2.

 

For Thanachart  Bank,  this partnership  supports  its strategy  of  providing 
market leading products and services  throughout Thailand. By partnering  with 
Prudential, Thanachart Bank's staff will benefit from additional training  and 
sales tools while its customers will  have access to a comprehensive range  of 
protection and savings products.

 

Thanachart Bank is the  fifth-largest retail bank in  Thailand with over  four 
million customers and over 630 branches. The acquisition of Siam City Bank  in 
2010 enabled Thanachart to increase its distribution network from 256 branches
to its current size.  Thanachart Life has only recently started to  distribute 
life insurance products through these additional Siam City Bank branches.   As 
part of the  bancassurance partnership,  Prudential and  Thanachart Bank  will 
collaborate in  providing excellent  customer service  and a  wide variety  of 
market leading life insurance, protection and savings products across all  the 
branches.  Prior to its acquisition by Thanachart Bank, Siam City Bank had its
own life insurance company, which was  not merged with Thanachart Life and  is 
not part of the acquisition being announced today.

 

Thanachart Life is a top-10 life insurer in Thailand^3 with around one million
in-force policies. In  the twelve months  to 30 June  2012, Thanachart  Life's 
profit after  tax was  £25 million  (THB 1,226  million). The  acquisition  of 
Thanachart Life will immediately double Prudential Thailand's market  share^2. 
Upon completion of the transaction, Thanachart Life will become a wholly-owned
subsidiary of Prudential Thailand.

 

Tidjane Thiam, Group  Chief Executive, Prudential  plc, said: "We  have had  a 
long standing ambition to significantly increase our presence in Thailand, one
of our  key target  markets  in South  East  Asia.  This  long-term  exclusive 
partnership with Thanachart Bank  positions us well for  the future and is  in 
line with our multichannel distribution  strategy.  We continue to invest  and 
grow our partnership business, alongside  our well established and  successful 
agency workforce.

 

"We are especially  proud to be  the partner  of Thanachart Bank,  one of  the 
largest and most successful banks in  Thailand, with a major shareholder  such 
as Scotiabank, a  leading international financial  institution.  Our  combined 
strong product offering, distribution platform and operational excellence will
continue  to  bring  attractive  benefits   to  customers,  sales  staff   and 
shareholders of both organisations".

 

Mr Somjate Moosirilert, CEO and President of Thanachart Bank, said, "We remain
committed to meeting  all of  the financial  services needs  of our  customers 
throughout Thailand, including life assurance. To best be able to do this,  we 
are  very  pleased  to  enter  into  this  long-term  exclusive  bancassurance 
partnership with  Prudential,  one  of  the  world's  leading  life  insurance 
companies. We are confident that with the strong branch network and  dedicated 
staff  of   Thanachart  Bank,   together   with  Prudential's   expertise   in 
bancassurance, we will be ideally positioned  to service our clients and  meet 
all their insurance needs."

 

 

_____________________________________________________________________________________________________

 

^1 Source: Swiss  Re  Sigma Report,  March  2012; life  insurance  penetration 
expressed as life insurance premiums as a percentage of GDP

^2 Source: Thai Life Insurance Association

^3 By gross premiums

 

 

Enquiries:

 

Media                               Investors/Analysts
Jonathan Oliver +44 (0)20 7548 3719 Raghu Hariharan    +44 (0)20 7548 2871
Robin Tozer     +44 (0)20 7548 2776 Richard Gradidge   +44 (0)20 7548 3860

 

Notes:

 

1)     A THB:£ foreign exchange rate of  48.88 has been used to determine  the 
figures disclosed above.

 

2)     The Thanachart Life  profit after tax estimate  for the year ending  30 
June 2012 is derived from the audited 2011 full year financial statements  and 
the unaudited 2012 half year financial statements of Thanachart Life.

 

 

About Prudential plc

Prudential plc is incorporated in England and Wales, and its affiliated
companies constitute one of the world's leading financial services groups. It
provides insurance and financial services through its subsidiaries and
affiliates throughout the world. It has been in existence for over 160 years
and has £363 billion in assets under management (as at 30 June 2012).
Prudential plc is not affiliated in any manner with Prudential Financial, Inc,
a company whose principal place of business is in the United States of
America.

 

About Thanachart Bank

Thanachart Bank Public Company Limited is Thailand's fifth-largest bank by
number of branches and the country's leading automobile lender. With more than
630 branches nationwide, Thanachart Bank offers a full range of financial
services to over four million customers including Retail, Hire Purchase,
Corporate and SME banking, Insurance, Life Assurance, Securities Brokerage and
Fund Management. As of 30 June 2012, Thanachart Bank's total assets exceeded
THB 920 billion.

 

As a leading commercial bank in Thailand, Thanachart Bank is further
strengthened by the strong support of its strategic shareholder, the Bank of
Nova Scotia ("Scotiabank"). Scotiabank owns 49 per cent of Thanachart Bank and
with headquarters in Canada, is a leading international bank serving 19
million customers in 55 countries around the world with a strong presence in
Thailand since 1980.  Scotiabank is ranked as one of the world's 50 safest
banks (No. 12) in 2012 by Global Finance Magazine. 

 

Forward-Looking Statements

This release may contain 'forward-looking statements' with respect to certain
of Prudential's plans and its goals and expectations relating to its future
financial condition, performance, results, strategy and objectives. 
Statements that are not historical facts, including statements about
Prudential's beliefs and expectations, are forward-looking statements.  These
statements are based on plans, estimates and projections as at the time they
are made, and therefore undue reliance should not be placed on them.  By their
nature, all forward-looking statements involve risk and uncertainty.  A number
of important factors could cause Prudential's actual future financial
condition or performance or other indicated results to differ materially from
those indicated in any forward-looking statement.  Such factors include, but
are not limited to, future market conditions, fluctuations in interest rates
and exchange rates, and the performance of financial markets generally; the
policies and actions of regulatory authorities, including, for example, new
government initiatives related to the financial crisis and the effect of the
European Union's 'Solvency II' requirements on Prudential's capital
maintenance requirements; the impact of competition, inflation, and deflation;
experience in particular with regard to mortality and morbidity trends, lapse
rates and policy renewal rates; the timing, impact and other uncertainties of
future acquisitions or combinations within relevant industries; the impact of
changes in capital, solvency standards or accounting standards, and tax and
other legislation and regulations in the jurisdictions in which Prudential and
its affiliates operate; and the impact of legal actions and disputes.  These
and other important factors may for example result in changes to assumptions
used for determining results of operations or re-estimations of reserves for
future policy benefits.  Further discussion of these and other important
factors that could cause Prudential's actual future financial condition or
performance or other indicated results to differ, possibly materially, from
those anticipated in Prudential's forward-looking statements can be found
under the 'Risk factors' heading in the Annual Report and the 'Risk Factors'
heading of Prudential's most recent annual report on Form 20-F filed with the
U.S. Securities and Exchange Commission, as well as under the 'Risk Factors'
heading of any subsequent Prudential Half Year Financial Report.  Prudential's
most recent Annual Report, Form 20-F and any subsequent Half Year Financial
Report are/will be available on its website at http://www.prudential.co.uk

 

Any forward-looking statements contained in this document speak only as of the
date on which they are made. Prudential expressly disclaims any obligation to
update the forward-looking statements contained in this document or any other
forward-looking statements it may make, whether as a result of future events,
new information or otherwise except as required pursuant to the UK Prospectus
Rules, the UK Listing Rules, the UK Disclosure and Transparency Rules, the
Hong Kong Listing Rules, the SGX-ST listing rules or other applicable laws and
regulations.

                     This information is provided by RNS
           The company news service from the London Stock Exchange
 
END
 
 
MSCFSIEDLFESELF -0- Nov/05/2012 07:00 GMT
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