AIA has announced it will acquire Commonwealth Bank of Australia’s insurance companies in Australia (CommInsure) and New Zealand (Sovereign) for AUD $3.8 billion.
As part of the deal, AIA will enter into 20-year distribution agreements with ASB Bank and CBA, to ensure life insurance products will continue to be provided to customers in New Zealand and Australia.
Sovereign and ASB customers will retain all the current benefits of their existing policies.
According to AIA, the acquisition and long-term distribution agreement will:
- Make AIA the leading life insurer in both Australia and New Zealand’s profitable individual life protection segment
- Be immediately accretive to AIA’s earnings
- Add to AIA’s strength in retail and group insurance by materially expanding and strengthening AIA’s distribution capabilities and customer reach to CBA and ASB’s combined base of 13 million customers
AIA Australia and New Zealand CEO, Damien Mu said, “The scale and nature of the agreements with CBA and ASB represent an enormous step forward for AIA in the pursuit of our purpose to make a difference in people’s lives, and will significantly transform and expand our market leading presence in Australia and New Zealand.”
“By partnering with CBA and ASB, we can bring together the expertise of each organisation to further improve our offering to help champion Australia and New Zealand to be the healthiest and most protected nations in the world,” Mu added.
Sovereign CEO, Nick Stanhope said although it was still ‘business as usual’, the deal also represents a new stage in Sovereign’s evolution.
“We are the product of several mergers and acquisitions of our own – so the prospect of becoming part of the AIA family, as our industry continues to consolidate globally, is an exciting prospect,” said Stanhope.
The acquisition is expected to be completed in 2018, subject to regulatory approvals in New Zealand, Australia and China.