UOB-Prudential deal under review: Sources

UOB is also weighing options for its non-life insurance business, run by publicly listed United Overseas Insurance, according to people familiar with the matter.
UOB is also weighing options for its non-life insurance business, run by publicly listed United Overseas Insurance, according to people familiar with the matter.ST FILE PHOTO

Bank's move comes after wave of lucrative distribution deals in region

HONG KONG • United Overseas Bank (UOB) is reviewing its insurance business, including an existing partnership with Prudential, after South-east Asia witnessed a wave of lucrative distribution deals, people familiar with the matter said.

UOB has been soliciting ideas from potential advisers regarding its life insurance tie-up with Prudential, including ways to get more value out of the operations, said the people, who asked not to be identified as the information is private.

Possibilities include renewing its deal with the London-based insurer which started in 2010, or looking for another partner, said the people.

The Singapore bank is also weighing options for its non-life insurance business, which is run by publicly listed United Overseas Insurance, according to the people.

UOB's deliberations are at an early stage, and no adviser has been appointed yet, they said.

Bancassurance deals in Asia have been fetching top dollar as insurers seek access to banking networks that reach the region's growing middle class.

Standard Chartered Bank expects at least US$1 billion (S$1.4 billion) over the 15-year life of its Asia agreement with insurer Allianz, people familiar with the matter said last year.

Joint Stock Commercial Bank for Foreign Trade of Vietnam in June was seeking a new distribution deal that could be worth as much as US$1 billion, Bloomberg News reported at the time.

Representatives for UOB and Prudential declined to comment.

UOB sold its life insurance unit to Prudential for $428 million in 2010. At the time, Prudential also entered into a 12-year agreement with UOB to sell its life, accident and health insurance products through the bank's branches in Singapore, Indonesia and Thailand.

In August, UOB reported second-quarter profit that beat analysts' estimates, surging to a record as income from lending and fee businesses jumped. Net income rose 28 per cent to $1.08 billion for the three months to June.

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A version of this article appeared in the print edition of The Straits Times on October 13, 2018, with the headline 'UOB-Prudential deal under review: Sources'. Print Edition | Subscribe