Zurich Insurance Group is buying ANZ’s Australian life insurance business. The deal makes the Swiss firm the largest retail life insurer down under.
The acquisition is worth A$2.85 billion ($2.14 billion) and is expected to be completed by the end of 2018, the Swiss insurer said on Monday.
Zurich said it expects the deal to contribute to profitability immediately. The acquisition also bolsters Zurich's share of life protection-based earnings, which lessens volatility of profits and increases the proportion of cash earnings.
As part of the purchase, Zurich will enter a 20-year distribution agreement with ANZ to distribute life insurance products through bank channels. This gives Zurich access to ANZ’s 6 million customers via its 680 branches and over 2,300 ATMs, as well as digital distribution channels.
Largest Insurer
The deal gives Zurich an 19 percent share of the Australian retail life insurance market – the Australian market's largest.
«We are acquiring a profitable business with loyal customers and a track record of strong, stable cash flows,» Jack Howell, Zurich’s Chief Executive Officer for Asia Pacific, said.
The deal price is made up of A$1 billion in upfront reinsurance commissions, expected to be paid subject to regulatory approval in May 2018. The balance is to be paid upon completion.
