Suncorp Group, an Australia-based financial services and solutions provider, has signed a share sale deed to sell its Australian life insurance business to Dai-ichi Life’s subsidiary TAL Dai-ichi Life Australia for A$725m ($523.7m).
The share sale deed between the parties features a 20-year distribution agreement with TAL to provide life insurance solutions through the Australian distribution channels of Suncorp. These include the digital channels, contact centers and store network.
The business being offloaded by Suncorp Group, which is known as Suncorp Life & Superannuation, has been providing life insurance and related services ever since it was established in 1996.
For the Australian firm, the deal marks the completion of a strategic review of Suncorp Life & Superannuation. The review also saw evaluation of multiple options such as additional reinsurance, partnership arrangements and divestment.
As per the terms of the partnership, Suncorp will continue to make income on the distribution of life insurance.
The Australian firm expects to return nearly A$600m ($433.4m) to its shareholders after completion of the transaction after deducting separation and transaction costs, provisions and hybrid capital.
It also said that the sale of the Australian life insurance business will not have any impact on its life insurance business in New Zealand.
TAL is a life insurance business which offers insurance products to Australian’s through various distribution channels including financial advisors, direct and group.
The company previously said that the deal with Suncorp Group brings together two major life insurance businesses. It also enables a long term relationship with the Suncorp Group including a portfolio of well-known Australian brands that include AAMI, APIA and GIO, said TAL.
The company, in a statement, said: “TAL has been diversifying its products and expanding distribution channels in order to provide products that meet needs of more customers, and this acquisition is part of TAL’s business growth strategy.”
The transaction is anticipated to be completed by the year end, should it satisfy certain conditions and receive regulatory approvals in both Australia and Japan.
Suncorp employs about 13,300 people and serves more than nine million customers across Australia and New Zealand.