Wed, Dec 13, 2017 page10

• ANZ sells life insurance arm to Zurich

  CONSOLIDATION: The move follows National Australia Bank’s and Commonwealth Bank’s selling of their insurance units as Australia’s top lenders streamline operations

  • AFP, SYDNEY
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  Australia and New Zealand Banking Group (ANZ) yesterday said it has offloaded its life insurance arm to Zurich Insurance for A$2.85 billion (US$2.14 billion), making the Swiss giant the nation’s largest retail life insurer by premiums.

  It follows National Australia Bank (NAB) selling most of its life insurance business to Japan’s Nippon Life Insurance Co and Commonwealth Bank of Australia shedding its insurance arm to AIA Group in recent years as Australia’s top lenders streamline operations.

  ANZ said the sale of One Path Life Australia Holdings, subject to regulatory approvals, was another step in its strategy to create “a simpler, better balanced bank focused on retail and business banking in Australia and New Zealand.”

  

  An ANZ sign adorns a branch of Australia and New Zealand Banking Group in Sydney, Australia, on May 3 last year.

  Photo: AFP

  “From the outset we’ve been focused on partnering with a high-quality organization culturally aligned to ANZ,” ANZ executive wealth Australia chief Alexis George said.

  “We’re pleased we will be able to provide our customers with access to wealth products from one of the world’s leading and most respected global insurers,” he said.

  “Zurich’s experience in working with banks around the world to provide insurance solutions, combined with its commitment to innovation and strong presence in Australia, is a good outcome for our customers, shareholders and distribution partners,” he said.

  It follows ANZ’s sale of its OnePath pensions and investments business to IOOF Holdings in October for A$975 million.

  All of Australia’s big banks are battling higher funding costs and lower interest margins, with rules now demanding they hold more reserves as a buffer against mortgages and fears over rising bad loans.

  They also face a hefty new government levy to raise A$6.2 billion over four years through a 0.06 percent charge on the borrowings of the big five — ANZ, Commonwealth, Macquarie, NAB and Westpac.

  As part of the agreement, ANZ and Zurich are to enter into a 20-year strategic alliance to offer life insurance solutions through ANZ’s distribution channels.

  Following the deal’s completion, expected late next year, Zurich would be Australia’s largest retail life insurer as measured by in-force premiums, with more than 1.5 million customers, or a 19 percent share of the market.

  The deal comes on the heels of a string of Asia-Pacific acquisitions by Zurich, with chief executive Mario Greco saying it was a good fit for its growth strategy.

  “ANZ’s portfolio of non-traditional and profitable retail products fits well with Zurich’s strategy to focus on capital-light protection and unit-linked business,” he said.

  “Furthermore, it strengthens the group’s position in the Asia-Pacific [region], while building on our strong bank distribution capabilities,” he said.
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