In a 15-year deal that could potentially be worth up to US$350 million, Singapore’s DBS Group plan to invite bids from insurers keen to sell general insurance products across key marketing of Southeast Asia’s biggest lender, reporter Reuters citing sources familiar with the matter said.
Three sources, who have declined to be identified, informed Reuters that DBS plans to seek bids from the insurers could come as soon as next month. Two of the sources said that the potential value of the deal could change depending on the structure of the deal and sales assumptions made by the bidders.
It is expected that DBS, who have partnerships in subsidiaries with Japanese Group MS&AD’s, will select one of two insurance partners for the deal which could cover all of its key markets of Singapore, Hong Kong, Indonesia, India, China and Taiwan. MS&AD's units are expected to participate in the bidding process, which is also likely to draw interest from France's AXA, Italy's Generali and Australia's QBE Insurance Group, the sources said.
The move underscores the under-penetrated region's growing attraction to insurers who see a big opportunity to boost business as rising incomes generate demand for property, motor and travel insurance products.
In the last few years, banks such as Standard Chartered and CIMB Group have formed partnerships with insurers as the latter were willing to pay hefty fees for access to lenders' branch networks and digital platforms.