UK insurance group Prudential acquires Thai life insurance firm Thanachart

British insurer Prudential plc (LON:PRU) on Monday said it would buy life insurer Thanachart Life Assurance Company Ltd, a fully-owned unit of Thai lender Thanachart Bank PCL, under an exclusive 15-year partnership with the bank to jointly expand their bank insurance operations in Thailand.

Prudential has agreed to pay GBP358m (USD576.15m/EUR447m) for Thanachart Life in cash at completion of the deal and an additional GBP10m 12 months after that, subject to post-closing adjustments, the buyer said.

The deal is in line with Prudential’s strategy to concentrate on high-growth markets in South East Asia, with Thailand targeted for substantial expansion. According to the group’s CEO Tidjane Thiam, Thailand is one of Prudential’s key target markets in South East Asia and the partnership with Thanachart Bank fits well into its multi-channel distribution strategy, while giving it a good position for the future.

Under the partnership, Prudential and Thanachart Bank will collaborate to offer a large range of life insurance protection and savings products across all branches, they said.

While as size the Thai life insurance market can compare to Indonesia and Malaysia, penetration is as low as 2.7%, allowing for significant long-term profitable growth opportunities, the buyer said. Between 2007 and 2011, market gross premium income in Thailand grew at an annual rate of 16%, with bank insurance accounting for 50% of life insurance first year premiums last year, up from 28% in 2007.

The addition of Thanachart Life, one Thailand’s top 10 life insurers with some one million policies in force, will immediately double Prudential Thailand’s market share, the buyer explained.

For its part, Thanachart Bank views the transaction with Prudential to help its strategy of offering top sector products and services, it said, adding that its employees will get additional training and sales tools, while its customers will gain access to a comprehensive portfolio of insurance and savings products.

Thanachart Bank claims the fifth place among the country’s retail banks with more than four million customers and over 630 branches.

Subject to regulatory clearance, the transaction is due to close in the first quarter of 2013.

Prudential completes $418m acquisition of US life insurer SRLC America

British insurer Prudential plc (LON:PRU) said on Wednesday that its fully-owned unit Jackson National Life Insurance Company had closed the buy of US life insurer SRLC America Holding Corp from parent Swiss Re Ltd, after securing all needed regulatory nods.

Prudential paid GBP418m (USD663m/EUR529m) for SRLC, above the GBP398m price announced at the agreement on 31 May, it said, adding that the initial price was based on an estimated balance sheet for the target, while the current price is based on an update of that estimate. The price could still be adjusted to reflect potential differences between the estimated balance sheet immediately before completion of the deal and the actual balance sheet at completion, the buyer said.

The bolt-on deal serves Jackson’s strategy to boost scale through a capital efficient move, president and CEO Mike Wells said in a comment in May.

The acquisition will immediately add to Prudential IFRS and EEV earnings, while contributing an estimated GBP100m to Jackson’s IFRS pre-tax earnings in the first year of ownership, the buyer has said.

By increasing Jackson’s profits from insurance income, the addition of SRLC will diversify Prudential’s earning base, the British group said.

The buyer said it would use existing cash reserves to finance the acquisition.

SRLC is a life insurance business within the US division of Swiss Re’s Admin Re, deriving earnings from long-duration cash flows generated mainly from life, whole life and basic universal life products