Global firms eye insurance in SE Asia
Thailand's life-insurance landscape is being reshaped with the emergence of global players that are showing keen interest in the fast-growing Southeast Asian market.Carlyle Group, CVC Capital Partners and KKR and Co are among firms that have made preliminary offers for a minority stake in Thai Life Insurance, Bloomberg said, quoting people with knowledge of the matter.
The unlisted Thai insurer, controlled by the Chaiyawan family, is selling at least a 20-per-cent stake valued at about US$500 million (Bt15 billion), the sources said. Japanese insurers Meiji Yasuda Life Insurance Co and Sumitomo Life Insurance Co have also expressed interest in the holding, one person said.
The stake purchase, potentially the largest by a private-equity firm in Thailand according to data compiled by Bloomberg, would follow at least two other foreign acquisitions of Thai life-insurance assets in the past six months. About a quarter of the Thai population hold insurance policies, less than in other Southeast Asian countries including Malaysia and Singapore, according to Fitch Ratings.
Barclays is running the sale for Thai Life, Bloomberg's sources said.
Last November, Prudential, through local unit Prudential Life Assurance (Thailand), bought out Thanachart Life Assurance for $550 million, and established a 15-year partnership deal in Thailand's bancassurance business with Thanachart Bank, which has more than 4 million customers and more than 630 branches nationwide.
"We have had a long-standing ambition to significantly increase our presence in Thailand, one of our key target markets in Southeast Asia," Prudential chief executive Tidjane Thiam said in a statement released after the deal's completion. "This long-term exclusive partnership with Thanachart Bank positions us well for the future and is in line with our multi-channel distribution strategy."
Britain's largest insurer by market value said Thailand's life-insurance market was comparable in premium terms to those of Indonesia and Malaysia. Life-insurance penetration in Thailand remains low, at only 2.7 per cent, representing substantial long-term growth potential.
ING Group's sale of its insurance assets in Thailand to Richard Li, son of Hong Kong tycoon Li Ka-shing, was completed earlier this year.
The buyers are seeking to take advantage of rising income of Thais after the country's strong economic development.
Sara Lamsam, president of the Thai Life Assurance Association, which covers 90 members, recently forecast 17.3-per-cent growth in insurance premiums this year to Bt459 billion.
He attributed this mainly to demand growth momentum witnessed in 2012 and supporting measures from the public sector as well as life insurers.
Of the total, Bt162 billion will come from new clients.
Last year, premiums expanded by 19.1 per cent from the past year to Bt391.39 billion. Of that total, Bt130.5 billion came from new clients.