Establish Strategic Bancassurance Partnership
TMB Bank Public Company Limited (“TMB”) is pleased to announce that it has entered into a strategic bancassurance partnership with Prudential Life Assurance (Thailand) Public Company Limited (“Prudential Thailand”), a subsidiary of Prudential plc, for an initial term of 15 years.
Following the recent combination between TMB and Thanachart Bank Public Company Limited (“Thanachart Bank”), FWD Life Insurance Public Company Limited (“FWD Thailand”), the existing bancassurance partner to TMB, and Prudential Thailand, the existing bancassurance partner to Thanachart Bank, have been in discussions and have now reached agreement that Prudential Thailand will become the strategic bancassurance partner to the whole enlarged network of the merged entity under TMB.
The agreement expands and extends the current successful partnership between Prudential and Thanachart Bank and Prudential Thailand will provide its best-in-class suite of life insurance products to more than 9 million TMB and Thanachart Bank customers and play a pivotal role in TMB’s vision for its customers.
The new life insurance partnership will also deepen and complement the existing strategic asset management relationship between TMB and Prudential in our two asset management joint ventures, TMBAM Eastspring and Thanachart Fund Eastspring. There is significant potential for synergies between the life and asset management partnerships, which will enable TMB’s customers to access a broader set of customer-centric life, health and wealth propositions.
To facilitate customer services of both banks during the transition period in 2020, TMB will continue to sell the life insurance products of FWD until the end of this year and will be able to gradually onboard products of Prudential Thailand through various channels operated by TMB. The transition period lasts between 1 April 2020 and 31 December 2020. Nevertheless, Thanachart Bank will continue selling the life insurance products of Prudential exclusively.
In addition, TMB and Thanachart Bank undertake to respectively take care of FWD’s and Prudential Thailand’s policy holders in accordance with the terms and conditions stated in the relevant policies without change.
For this transaction, TMB will record income of THB 1.3 bn in 2020 and will gradually record revenue worth approximately THB 20.8 bn throughout the combined initial term and transition period, starting April 2020. In addition, TMB will stop the recognition of revenue from FWD under the old bancassurance agreement, starting from 1 April 2020 with no impact to TMB’s recognized revenue of THB 4.4 bn (during the period between 1 January 2017 and 31 March 2020 according to existing agreement).
Mr. Piti Tantakasem, Chief Executive Officer of TMB Bank, said “We look forward to taking our life insurance business to the next level with Prudential Thailand, as we provide innovative offerings to customers across the country. At the heart of this partnership is a shared commitment to making a difference in our customers’ lives by addressing their unique needs, ultimately enhancing their financial well-being and supporting the country’s sustainable development. I would also like to thank FWD for the strong partnership and joint product development through all these years and FWD will continue to service its policies purchased by TMB customers.”
Nic Nicandrou, Chief Executive of Prudential Corporation Asia, said, “We are delighted to enter into a long-term strategic life insurance partnership with TMB, further complementing our asset management relationships in Thailand. This partnership combines TMB’s unrivalled local market knowledge and reach with Prudential’s significant expertise in life, health and savings solutions. It will provide Thais with access to a fast growing and expanding digital platform and best in class holistic solutions to both protect their families and grow their wealth. We are also delighted to contribute to Thailand’s economic and social development by investing in local capital markets and by creating significant employment opportunities.”
Mr. Huynh Thanh Phong, FWD Group Chief Executive Officer, commented, “I’d like to thank TMB for their professionalism and long-term support during our collaboration over the past few years. This agreement benefits all parties and, most importantly, means our TMB customers will continue to receive their protection, benefits and customer servicing in accordance with the terms of their FWD policies.”