Canada Stockwatch – Manulife Agrees 15-Year Deal With DBS To Drive Growth In Asia

Canada Stockwatch – Manulife Financial Corp. (TSE:MFC, Mkt cap 42.45B, P/E 12.01, Div/yield 0.16/2.88, EPS 1.79, Shares 1.97B) looks set to get a slice of the lucrative Asian life-insurance pie after agreeing a deal worth more than $1 billion with Singaporean lender DBS Group Holdings Ltd. which will see Manulife’s insurance products distributed through DBS’s branches across the region.

Canada Stockwatch Manulife Asia world fastest-growing life-insurance markets

Canada Stockwatch – Manulife: Asia is said to be one of the world’s fastest-growing life-insurance markets.

As the Wall Street Journal reports, Asia is said to be home to one of the world’s fastest-growing life-insurance markets, prompting a number of global insurers to seek a route into it.

Manulife, which put pen to paper on the deal with DBS on Wednesday (8 April), is the latest insurer hoping to see a sharp increase in its sales in the region through the multiyear agreement.

The deal will see Toronto-based Manulife hand over a one time-time, upfront payment of $1.2 billion to DBS, with successive variable payments to be made depending on the success of the partnership.

The length of the contract would be an industry standard 15-year agreement covering Singapore, Hong Kong, China and Indonesia, the two companies said in a joint statement.

Manulife currently has a presence in 12 markets across Asia, boasting more than 57,800 agents in the region, according to its annual report. Manulife’s Asia operations recorded $1.3 billion in insurance sales last year, which represents a hike of 31% over its 2013 insurance sales, which amassed just over $1 billion.

Its annual report also revealed that Asia accounted for 18% of Manulife’s total premiums and deposits last year and 13% of its total assets under management.

Manulife president and CEO, Donald A. Guloien, explained why the company made the move: “It accelerates our growth in Asia, deepens and diversifies our insurance business, and gives us access to a much wider range of customers.”

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