Prudential Life Assurance (Thailand) Public Company Limited (“Prudential Thailand”), a subsidiary of Prudential plc, is pleased to announce it has entered into a strategic bancassurance partnership with TMB Bank Public Company Limited (“TMB”) with an initial term of 15 years to provide Prudential’s leading suite of health and wealth solutions to TMB’s large and growing customer base.
The new agreement significantly expands and extends Prudential’s successful partnership with Thanachart Bank to TMB Bank, which following their merger is the sixth largest bank by deposits and fourth largest bank by branches in Thailand.
Thailand is the second largest life insurance market and the largest mutual fund market in ASEAN with significant growth potential. The bancassurance partnership strongly complements Prudential’s top-five market position in the mutual fund market. It also deepens the strong relationship with TMB established through Prudential’s joint venture asset management partnerships¹, where Prudential have a 12 per cent share² of the Thai mutual fund market. Together, both partners now have a high-quality platform to deliver best in class, holistic health and wealth solutions to 9 million TMB customers equivalent to 17 per cent of the country’s adult population³.
The new strategic partnership with TMB enables Prudential Thailand to achieve the scale and presence in the life insurance market, consistent with its ambition of being a leading player. It is also strongly aligned with TMB’s own aspirations of being a partner in its customers’ lives in providing a suite of insurance solutions and digital services.
Mr. Nic Nicandrou, Chief Executive of Prudential Corporation Asia, said, “We are delighted to enter into a long-term strategic life insurance partnership with TMB, further complementing our asset management relationships in Thailand. This partnership combines TMB’s unrivalled local market knowledge and reach with Prudential’s significant expertise in life, health and savings solutions. It will provide Thais with access to a fast growing and expanding digital platform and best in class holistic solutions to both protect their families and grow their wealth. We are also delighted to contribute to Thailand’s economic and social development by investing in local capital markets and by creating significant employment opportunities.”
Mr. Piti Tantakasem, Chief Executive of TMB, said, “We look forward to taking our life insurance business to the next level with Prudential Thailand, as we provide innovative offerings to customers across the country. At the heart of this partnership is a shared commitment to making a difference in our customers’ lives by addressing their unique needs, ultimately enhancing their financial wellbeing and supporting the country’s sustainable development.”
The extended exclusive partnership agreement will commence on 1 January 2021 and until this time the current arrangement with Thanachart Bank will continue. This agreement requires the novation of TMB Bank’s current bancassurance distribution agreement with another insurance group. The change in arrangements will cost Thai Baht 24.5 billion (equivalent to USD 754 million based on exchange rate at 18 March 2020) which will be paid in two instalments, with Thai Baht 12.0 billion due in April 2020 and the remainder on 1 January 2021. The funding for this transaction will utilise a mixture of Prudential Asia’s existing resources and Prudential plc own resources, potentially also including new debt. In line with the Group’s policy, the amounts described above will be capitalised as an intangible asset representing distribution rights.