This Asian acquisition may put added pressure on its competitor, AIA Group.
Insurance news from the Asia Pacific region has shown that Prudential PLC has just entered into an acquisition agreement to buy the coverage unit from Thanachart Bank in Thailand, for a reported $590 million, in cash.
This will double the insurer’s current market share within that Asian nation.
This is expected to add greater competition to the insurance news in Southeastern Asia, which is a rapidly growing marketplace where AIA Group has been working to maintain leadership.
This was the first insurance news from the region by the British insurer since 2010.
At that time, it made insurance news when Tidjane Thiam, the chief executive, ceased a bid that was made for $35 billion for the AIA, which was the American International Group’s former Asian unit.
Since 2010, Southeast Asia has become the location of some fierce battles between Prudential and AIA, which are the two primary insurers within the region. Recently, Prudential has also made insurance news by stating that it plans to open a Cambodian office. Similarly, Only last month AIA said that it had made a $1.73 million billion purchase of the ING insurance unit in Malaysia.
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According to Swiss Re, among the six countries within that region, it is expected that the premiums will rise by an average of 7.9 percent in 2013. This is over twice the life insurance average for the rest of the world.
The acquisition of Thanachart’s insurance unit by Prudential will significantly increase the insurer’s presence in the region and will start to close the gap between it and AIA, which currently holds the top spot in the country. This has helped Prudential to make sure that they have a very solid hold in the overall Southeast Asia marketplace, as Thailand had previously been a weaker zone, but has now been notably bolstered.
This insurance news will take them an important step forward in the marketplace as a whole, as their improved position in Thailand will place them more centrally in a market that is attractive both demographically and structurally.