Sun Life nears insurance deal with Hong Kong's Dah Sing | Financial Post

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Sun Life nears deal with banking group Dah Sing that will boost insurer's presence in Hong Kong

'Partnership with Dah Sing is compelling because of its growth potential in Macau,' analyst says

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Sun Life Financial Inc. is close to sealing an insurance partnership with Hong Kong banking group Dah Sing Financial Holdings Ltd., according to people familiar with the matter.

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The Canadian insurer has emerged as the likeliest partner for Dah Sing after beating out rival bidders, the people said, asking not to be identified because the matter is private. The so-called bancassurance agreement could be valued at about US$200 million, the people said.

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Sun Life and Dah Sing are hammering out the details of a transaction that could be announced as early as this week, the people said. Representatives for Dah Sing and Sun Life declined to comment.

Dah Sing has been working with an adviser to pursue a bancassurance partnership after it terminated an agreement with Tahoe Life Insurance Co., Bloomberg News reported in August. Sun Life, Manulife Financial Corp. and closely held FTLife Insurance Co. were among firms considering bids, people familiar with the matter have said.

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A bancassurance partnership is “an arrangement between a bank and an insurance company allowing the insurance company to sell its products to the bank’s client base,”
according to Investopedia.com.

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A deal would give a boost to Sun Life’s presence in Hong Kong, where the government has lifted most of the COVID restrictions and reopened its borders with China. In November, Sun Life chief executive Kevin Strain said insurance sales in Hong Kong may take longer to rebound than in other parts of Asia due to a slow return of visitors.

Dah Sing provides banking, insurance and other financial services in Hong Kong, Macau and mainland China, according to its website. In July, Japan’s Norinchukin Bank bought a stake of about 10 per cent in Dah Sing from Mitsubishi UFJ Financial Group as part of a business tie-up. Shares of Dah Sing Financial have risen approximately 14 per cent this year, valuing the firm at US$839 million.

“A bancassurance partnership with Dah Sing is compelling because of its growth potential in Macau,” Bloomberg Intelligence analyst Steven Lam wrote in a September report.

Bloomberg.com

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