HONG KONG, April 8 (Reuters) - Canadian insurer Manulife Financial Corp is close to an about $1 billion deal to sell products through Singapore lender DBS Group Holdings Ltd's branch network across Asia, a person with direct knowledge of the matter said.
Manulife would pay cash to the Singaporean bank over the life of the 15-year contract, the person said, declining to be named as the details of the transaction were not yet public.
DBS spokeswoman declined to comment and Manulife was not immediately available to comment.
The agreement is known as a "bancassurance" deal, where the insurance products are distributed through a bank's branch network rather than through individual agents.
The "bancassurance" model - as opposed to the traditional agency model - is lucrative for commercial banks in Asia because global insurers are willing to pay hefty fees for access to lenders' branch networks.
In similar moves, AIA Group struck a 15-year exclusive deal with Citibank in Asia in 2013, for which AIA said it paid an $800 million upfront payment. Prudential Plc also struck an agreement last year with Standard Chartered, agreeing to pay $1.25 billion in fees, to extend its current agreement for 15 years.
Reuters reported last October that DBS Group had hired Morgan Stanley to find a partner to sell life insurance products in Asia under a new deal, after its pact with Aviva Plc ends in 2015. (Reporting by Rama Venkat Raman in Bengaluru and Denny Thomas in Hong Kong; Additional reporting by Saeed Azhar in Singapore)