The new agreement extends the original alliance which commenced in 2010 to 2034 and increases the geographical scope to include a fifth market, Vietnam, alongside our existing footprint across Singapore, Malaysia, Thailand and Indonesia.
Under the terms of the renewal, Prudential's life insurance products will be distributed through UOB's extensive network of more than 400 branches in five markets, providing access to over four million UOB customers. In addition, Prudential will use its digital capabilities to deliver protection focused propositions to aid UOB's digital bank expansion and customer acquisition aspirations. An initial fee of £662 million will be paid under the agreement which will be funded through internal resources.
Mike Wells, Group Chief Executive of Prudential, said: “We have built a highly effective bancassurance partnership with our colleagues at UOB that has driven double-digit annual sales and new business profit growth since 2010. The extended partnership provides UOB's growing customer base with continued access to Prudential's market-leading and innovative product suite, and demonstrates our commitment to fulfilling the evolving savings and protection needs of consumers. We believe there is a significant opportunity for future growth in Southeast Asia and the renewal reflects our commitment to using our capabilities to benefit our customers and shareholders”.
Mr Wee Ee Cheong, Deputy Chairman and Group Chief Executive Officer of UOB, said the renewed agreement reflects the long-term approach and success of this partnership since 2010, “UOB is focussed on creating financial solutions in the best interests of customers and which are essential to their lifestyles and life stages. We believe that our continued partnership with Prudential will create greater value for our customers and our stakeholders across the region and reinforces our position as the premier ASEAN bank. We look forward to working together with Prudential to continue developing unique and innovative insurance solutions for Asia's burgeoning affluent population and its increasing number of mobile-first and mobile-only consumers.”
Footnotes:
As part of this transaction, Prudential has agreed to pay UOB an initial fee of £662 million for distribution rights which is not dependent on future sales volumes. This amount will be paid in three instalments of £230 million in February 2019, £331 million in January 2020 and £101 million in January 2021.