An Australian bank which provides financial services, including general insurance, is considering options for the group’s life insurance business – including the sale of the $5 billion unit.
The CommInsure business, home to one of the country’s largest life insurance books, has been something of a thorn in the side of the Commonwealth Bank of Australia (CBA) recently having faced internal reviews and a probe by the corporate regulator after an insurance scandal broke out last year. Both cleared the business of major issues.
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According to
Street Talk, investment bank JPMorgan has been working with the multinational bank on the review, with options including the sale of the unit as well as a quota share reinsurance deal with an offshore insurer.
The review comes as many other domestic entities, including AMP and
Suncorp, have been reviewing the future of their life insurance arms; while some have already exited, including National Australia Bank and
Macquarie Group.
ANZ Banking Group, meanwhile, is hoping to get as much as $4.5 billion for the sale of its wealth arm, which includes its life insurance unit.
Sources told the publication that the life insurance review has got nothing to do with
APRA’s new capital standards, and that the bank believes it is capable of meeting the new requirements through organic generation.
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