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SINGAPORE is expected to "quickly" become Canadian insurer Manulife Financial Corporation's third largest business in the region, behind Hong Kong and Japan, now that it has strengthened its multi-distribution strategy through an exclusive 15-year partnership with DBS Bank, which started from Jan 1.
The deal took effect nine months after Manulife and DBS announced the US$1.2 billion regional bancassurance deal, where the insurer would distribute its products in some 200 DBS branches in Singapore, Hong Kong, China and Indonesia.
Speaking to the media on Tuesday, Steve Roder, chief financial officer of Manulife, said the Asian region now accounts for more than 30 per cent of the insurer's earnings.
In the third quarter of 2015, more than 60 per cent of global insurance sales and over 70 per cent of new business value associated with those sales came from the Asian region, he said, adding that the bancassurance deal will significantly broaden Manulife's footprint in the region.
Mr Roder added that the deal would be accretive to Manulife's earnings in 2017 and he expects a noticeable pick-up in sales attributable to Singapore in 2016.
The two partners will also be co-funding up to S$100 million over the next 15 years to invest in digital technology and innovative enhancements, he said.
Said Tan Su Shan, group head of consumer banking and wealth management at DBS: "This partnership represents the coming together of two leading organisations, combining DBS' superior Asian banking franchise with the insurance and wealth management expertise of Manulife, a global leader with a long-term commitment to Asia. With the establishment of the joint fund, we will be able to focus on the development of innovative solutions to serve Asia's fast-growing consumer base, and help them fulfil their retirement and insurance needs."
The regional bancassurance deal will allow Manulife to tap DBS's six million retail, wealth and SME (small and medium enterprise) customers via the lender's Internet and mobile banking platforms, on top of the branch network.
The move dovetails into Manulife's strategy to tap the lucrative savings-rich population in the region to grow its business through multiple distribution channels.