France’s AXA and Germany’s Allianz SE have advanced to the second stage of bidding for a Standard Chartered deal that would enable the sale of general insurance products through the bank’s Asian branches, people familiar with the matter said.
A unit of Japan’s MS&AD, Standard Chartered’s existing general insurance partner, has also progressed to the next round, one of the people added. It was not immediately clear if other suitors who had made initial bids were through to the second round, which included another Japanese insurer.
The 15-year deal could be worth around $300 million, calculated on the basis of an upfront payment to access the branch network and the net present value of future commissions and deferred payments, said the people, who declined to be identified because the details of the deal were not public.
Standard Chartered will decide on a preferred bidder for the so-called bancassurance deal after the second round, they said.
Representatives for Standard Chartered, Allianz, AXA and MS&AD declined comment.
A source with direct knowledge of the matter said Standard Chartered may not necessarily choose the bidder with the highest price as the bank needs a partner who would help it build up a retail business.
The bancassurance model – as opposed to the traditional agency model – is lucrative for banks because global insurers are willing to pay hefty fees for access to lenders’ branch networks and for exposure to a rapidly growing middle class in emerging markets.
Asia has seen several large bank distribution deals for life insurance in the past three years and transactions for non-life insurance are also heating up.
In June, Malaysia lender CIMB entered a similar agreement with insurer Sompo Japan Nipponkoa Holdings Inc while Tokio Marine Holdings Inc is in exclusive talks to buy RHB Bank’s general insurance unit.
The insurance market in Asia is expected to grow 6-7 percent per year, AXA said this year.
AXA is aiming to boost its customer base from 20 million to over 100 million by 2030 and plans to increase underlying earnings to 900 million euros in 2020 from 551 million euros in 2015.
Allianz has been expanding its presence in Asia. In June it completed a deal to acquire a 51 percent stake in PNB life in Philippines and signed a 15-year bancassurance deal with Philippine National Bank.