Thanachart Capital Public Company Limited (TCAP) – a major shareholder in Thailand’s sixth largest lender Thanachart Bank – is expanding its insurance business, after having recently entered into a joint venture (JV) with Thai-listed shopping mall and property developer MBK Public Company Limited (MBK).
The arrangement will see TCAP partnering MBK to form two JV firms to operate life and non-life insurance broker and back-office support businesses respectively, reported Deal Street Asia.
The first JV, TM Broker, will have a registered capital of 20 million baht (US$565,291) and the second JV, MT Service 2016, will start with a registered capital of 50 million baht. Suphadej Poonpipat, chief executive officer of TCAP, says that TCAP and MBK will hold 51% and 49% respectively in both JV firms.
“TM Broker will provide more choices of life and non-life insurance to customers and generate more income to us. Meanwhile, MT Service 2016 will help reduce duplication and increase utilisation of resource sharing,” explains Mr. Suphadej.
In 2012, Thanachart Bank entered into an agreement to establish an exclusive 15-year partnership to jointly develop their bancassurance business in Thailand. In addition, it relinquished its life insurance business to Prudential Thailand, which acquired wholly Thanachart Life Assurance Company Limited – then a wholly-owned life insurance subsidiary of the Thanachart Bank – for 18 billion baht.
Thailand, with a population 65.7 million, trails Southeast Asian markets such as Singapore and Malaysia in terms of insurance penetration rates. According to statistics from the Thai Life Assurance Association, total life insurance premium income in the country is forecast to grow by 9% to 585.7 billion baht in 2016, after rising by 6.7% the previous year.
Southeast Asia’s biggest insurance deal so far is AIA Group’s $1.73 billion purchase of Dutch lender ING’s Malaysian insurance business in 2012.
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