Zurich Insurance Group said it has completed the acquisition of the life insurance businesses of Australia & New Zealand Banking Group Ltd. (ANZ), becoming a major life insurer for retail customers in the Australian market.
The A$2.85 billion (US$2 billion) deal to purchase OnePath Life, which was first announced in December 2017, expands Zurich’s bank distribution footprint by providing access to up to 6 million new customers in Australia, the company confirmed in a statement.
The acquisition reinforces Zurich’s strategy of focusing on protection and less capital-intensive savings products, said Zurich.
Further, Zurich added, the acquisition is in line with the group’s M&A strategy, focused on building leading positions in attractive markets while releasing capital from non-core operations.
As part of the transaction, Zurich’s existing independent financial adviser (IFA) and bank distribution channels in Australia will be broadened by a 20-year agreement with ANZ to distribute life insurance products through bank channels.
This cooperation agreement strengthens Zurich’s business by giving it access to ANZ’s customer base served through more than 630 branches, and additional capabilities in independent distribution channels.
As a result of this acquisition, Zurich will have a market share of around 20 percent in retail life and 6 percent in the local group life market.
“Zurich is strengthening its business in Australia and we can now engage with up to 6 million new customers with this acquisition of OnePath Life and the access to ANZ’s distribution channels,” said Group Chief Executive Officer Mario Greco.
“Asia Pacific is a key region for Zurich and this deal adds further complementary products and additional bancassurance distribution capacity in the region,” he added. “OnePath Life’s retail business, focused on protection and savings products, is perfectly aligned with our strategy in life insurance and should further add to our strong cash remittances.”
Since Zurich laid out its strategic three-year plan in November 2016, Zurich said it has made significant progress in improving the overall business mix and has strengthened its customer focus.
During the past few years, Zurich affirmed that it has released capital through the exit of a number of non-core businesses, while reinvesting in a series of bolt-on acquisitions. These acquisitions have been focused on creating leadership positions in chosen market segments in key geographies, including Australia, Argentina, Indonesia and the U.S.
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