Zurich Insurance Group announced that it has entered into an agreement to acquire 100 percent of ANZ’s life insurance businesses, OnePath Life, in Australia, for A$2.85 billion (US$2.14 billion).
Both parties expect the transaction, which is subject to regulatory approval, to be completed by the end of 2018.
As a result of the transaction, Zurich said, it will become the leading retail life insurer in Australia, with about a 19 percent share of the retail sector and about 6 percent of the group life market.
Zurich also plans to enter into a 20-year distribution agreement with ANZ in Australia to distribute life insurance products through bank channels. Under this agreement, Zurich will have access to ANZ’s 6 million customers who are served through the bank’s more than 680 branches and over 2,300 ATMs, as well as digital distribution channels.
“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,” said Group Chief Executive Officer Mario Greco. “Furthermore, it strengthens the group’s position in Asia Pacific, while building on our strong bank distribution capabilities.”
The acquisition is expected to contribute to the group’s profitability from day one, generating strong cash flows that will increase return on equity, cash remittance targets and shareholder returns, said the company in a statement.
“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,” said Jack Howell, Zurich’s chief executive officer for Asia Pacific. “Importantly, we are acquiring a profitable business with loyal customers and a track record of strong, stable cash flows.”
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