Swiss insurer, Zurich Insurance will pay $2.85 billion ($US2.14 billion), for the ANZ’s life insurance business.
The deal will see Zurich become number one in the Australian retail life insurance market with a share of 19%. Up till now, Zurich has held the number-five position.
It is the insurer’s third acquisition in Australia in the past two years. In March of last year it bought Macquarie’s life insurance business for $US300 million, and a year ago it paid $US550 million for Cover-More, a travel insurance business.
The sale will raise questions about what the ANZ will do with the money. The ANZ had Tier one capital of 10.6% which is the level regulators want.
Shareholders will have their chance to ask at next Tuesday’s AGM.
The purchase is the latest and largest foray by the Swiss company into the Australian market.
Zurich said in a statement that the deal fits in with its strategy to expand in capital-light life insurance products.
Under the deal, Zurich will be able to sell its products via ANZ’s 680 bank branches.
Zurich chief executive Mario Greco said: “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. Furthermore, it strengthens the group’s position in Asia Pacific, while building on our strong bank distribution capabilities.”
ANZ shares ended at $28.58 yesterday, down 7.7%.
