Commonwealth Bank of Australia has agreed to sell 100% of its life insurance businesses – CommInsure Life in Australia and Sovereign in New Zealand – to AIA Group for $3.8bn.
The agreement includes a 20-year partnership with AIA to provide life insurance products to customers in Australia and New Zealand.
Customers of CommInsure Life and Sovereign will continue to have access to life insurance products through Commonwealth Bank and life and health insurance products through ASB Bank, which is owned by Commonwealth Bank.
Commonwealth Bank will continue to earn income on the distribution of life and health insurance products. However, the sale and partnership do not include general insurance and the CommInsure brand will be retained.
Commonwealth Bank CEO Ian Narev said: “The combination of AIA’s leading insurance capability and scale and Commonwealth Bank’s broad distribution, and our complementary values and commitment to customer focus and innovation, mean that a partnership between us will create an even better experience for our customers, in a more efficient way for our shareholders.”
AIA Group chief executive and president Ng Keng Hooi said: “The acquisition of CBA’s life insurance businesses and the new 20-year bancassurance partnership with CBA will strengthen AIA’s protection market leadership and expand our distribution capabilities in these markets.”
The transaction is subject to regulatory approvals in Australia and New Zealand, and the transfer of Commonwealth Bank’s equity interest in BoComm Life Insurance Company out of CommInsure.
Commonwealth Bank is considering a range of strategic alternatives for the BoComm Life equity interest, which would be conditional on approval from the China Insurance Regulatory Commission.
The transaction is expected to be completed in 2018.
Image: Commonwealth Bank will sell its Australian and NZ life businesses to AIA in a $3.8bn deal. Photo: courtesy of Commonwealth Bank of Australia.