The sale is made up of two transactions, inclusive of $1bn of upfront reinsurance commission from Zurich which is expected to be paid in May 2018 with the remaining balance paid on completion of the deal.
The transaction will see Zurich take on 100% of ANZ’s One Path Life Insurance but does not include businesses in New Zealand with ANZ also set to retain its lenders mortgage insurance, general insurance distribution and financial planning businesses.
The deal now makes Zurich the largest retail life insurance firm in the country, as measured by in-force premiums, with more than 1.5 million customers as the international giant owns a 19% share of the Australian life market.
“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. Furthermore, it strengthens the Group’s position in Asia Pacific, while building on our strong bank distribution capabilities,” said Zurich CEO, Mario Greco.
As part of the transaction, Zurich will enter into a 20-year distribution agreement with ANZ in Australia to distribute life insurance products via bank channels.
Jack Howell, Zurich’s CEO for Asia Pacific, said that the firm is taking on a book of business with a track record of stable cash flow.
“Zurich has earmarked the Asia Pacific region to be a major engine of growth in distribution and service capabilities, building on our recent acquisitions of Macquarie’s retail life insurance business and the Cover-More Group,” Howell said.
There are no changes to any current insurance policies as a result of the transaction, which includes general insurance products offered by ANZ via QBE.
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