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.
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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