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Hong Kong's FWD to acquire Thai insurer SCB Life for US$3 billion

By Asia Asset Management  
Jul 3, 2019

Hong Kong’s FWD Group is acquiring the insurance unit of Siam Commercial Bank (SCB) for 92.7 billion baht (US$3 billion) in what the Bangkok-based lender describes as the “largest ever” life insurance pact in Southeast Asia.

It’s the third acquisition from a foreign company in eight months for FWD, an insurer run by Hong Kong tycoon Li Ka-Shing’s son, Richard Li.

The purchase of SCB Life Assurance Public Company is expected to be completed later this year, subject to regulatory and shareholder approval, SCB says in a statement on July 1.

According to the bank, it’s “the largest ever life insurance transaction in Southeast Asia in terms of total value”. It will allow the Hong Kong company to distribute its life insurance products to SCB’s customers in Thailand through the lender’s distribution channels.

“SCB is the leading bank in Thailand, with an extensive presence and deep local experience…Through this collaboration, we will bring out combined product and digital capabilities to help customers achieve their financial goals and aspirations,” FWD’s Group Chief Executive Officer Huynh Thanh Phong says in the statement.

SCB Chief Executive Officer and Chairman Arthid Nanthawithaya adds that bancassurance, where insurance products are distributed via banks, is a “key long-term strategic priority” for the Thai lender, and the partnership with FWD will help create “significant long-term value” for its customers and shareholders.

The deal comes just three days after FWD signed an agreement with US insurer Metropolitan Life Insurance Company to acquire the latter’s Hong Kong businesses, for an undisclosed amount.

Last October, FWD acquired an 80% stake in Indonesia’s PT Commonwealth Life from Commonwealth Bank of Australia, also for an undisclosed sum.

A Shenzhen-based insurance analyst says tying up with local players is a common route for foreign insurers trying to break into the Southeast Asian market.

“However, not all of the partnerships were successful. Newcomers to the acquisition market may also need to examine whether their product offerings fit local demand. They also need to avoid product overlapping with their local partners,” the analyst tells Asia Asset Management, speaking on condition of anonymity.

FWD had $30 billion of total assets as of December 2018, and SCB had around 3.2 trillion baht of assets as of March 2019.