UOB reviewing insurance deal with Prudential

Singapore

SINGAPORE lender United Overseas Bank (UOB) is reviewing its insurance business, including an existing partnership with Prudential, after South-east Asia witnessed a wave of lucrative distribution deals, people familiar with the matter said.

UOB has been soliciting ideas from potential advisers regarding its life insurance tie-up with Prudential, including ways to get more value out of the operations, said the people, who asked not to be identified because the information is private.

Possibilities include renewing its agreement with the London-based insurer, which started in 2010, or looking for another partner, they said.

The bank is also weighing options for its non-life business, which is run by publicly-listed United Overseas Insurance (UOI), according to the people.

UOB's deliberations are at an early stage, and no adviser has been appointed yet, they said.

Shares of UOI rose 4.4 per cent in Singapore trading Friday, the most in more than five weeks.

Bancassurance deals in Asia have been fetching top dollar as insurers seek access to banking networks reaching the region's growing middle class. Standard Chartered expects at least US$1 billion over the 15-year life of its Asia agreement with insurer Allianz SE, people familiar with the matter said last year.

PT Bank Central Asia signed a revised bancassurance deal with AIA Group Ltd last year, after people with knowledge of the matter said the Indonesian lender worked with an adviser to find ways to get more money from the partnership. Bank for Foreign Trade of Vietnam JSC in June was seeking a new distribution deal that could be worth as much as US$1 billion, Bloomberg News reported at the time.

Representatives for UOB and Prudential declined to comment.

UOB sold its life insurance unit to Prudential for S$428 million in 2010. At the time, Prudential also entered a 12-year agreement with UOB to sell its life, accident and health insurance products through the bank's branches in Singapore, Indonesia and Thailand.

In August, UOB reported second-quarter profit that beat analysts' estimates, surging to a record as income from lending and fee businesses jumped.

Net income climbed 28 per cent to S$1.08 billion for the three months through June. BLOOMBERG