Besides the initial payment of US$1.2 billion, Manulife will also make ongoing, variable payments to DBS "based on the success of the partnership", the two firms said in a joint statement.
The bancassurance model - which involves selling insurance through banks as opposed to the traditional agency - is lucrative for commercial banks in Asia because global insurers are willing to pay hefty fees for access to lenders' branch networks.
According to Reuters, AIA Group struck a 15-year exclusive deal with Citibank in Asia in 2013, for which AIA made a US$800 million upfront payment. UK insurer Prudential also struck an agreement last year with Standard Chartered, agreeing to pay US$1.25 billion in fees to extend its current agreement for 15 years.
DBS CEO Piyush Gupta said: “Bancassurance is a key focus for DBS and an important part of our overall customer value proposition."
Manulife is the world's sixth-largest life insurer with principal operations in Asia, Canada and the United States, where it operates under the John Hancock name. The company first established a presence in Singapore in 1898 while its Hong Kong operations began in 1897. Assets under management by Manulife and its subsidiaries were approximately C$691 billion (S$753 billion) as at Dec 31, 2014.
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