Zurich Insurance Acquires ANZ Life Insurance for $2.1 Billion, Becomes Australia’s Biggest Life Insurer
Zurich Insurance Group has agreed to buy ANZ’s life insurance arm in Australia for AUD 2.85 billion ($2.14 billion). With the acquisition, the Swiss company will become Australia’s biggest life insurer with an approximate 19% market share of the Australian insurance market. The deal is expected to complete by the end of 2018.
“Zurich becomes Australia’s Biggest Life Insurer buying $2.1 Billion ANZ”
The deal will also give Zurich access to ANZ’s 6 million customers. It will serve them through the bank’s 680 branches, ATMs, and online services for 20 years. It will increase cash flows by around $225 million over the 2017-2019 planning period.
The transaction price comprises AUD 1 billion of upfront reinsurance commissions, expected to be paid subject to regulatory approval in May 2018 with the remaining balance paid on completion.
“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,” said Group Chief Executive Officer Mario Greco. “In addition, the existing portfolio provides a highly cash-generative business that will add to our cash remittances, increase our business operating profit after tax return on equity (BOPAT ROE) target by 50 basis points and support dividend growth beyond that implied by our existing plan.”
The acquisition is expected to contribute to the Group’s profitability from day one, generating strong cash flows which will support future dividend growth. The transaction will also increase the proportion of stable life protection-based earnings, reducing overall Group earnings volatility and increasing the proportion of life earnings remitted as cash back to the Group. In view of these earnings benefits, Zurich expects to raise its current BOPAT ROE target by 50 basis points by 2019. The transaction is also expected to increase the level of overall cash remittances over the 2017-2019 planning period by AUD 300 million (USD 225 million).
As part of the transaction, Zurich will enter into a 20-year distribution agreement with ANZ in Australia to distribute life insurance products through bank channels. Under this agreement, Zurich will have access to ANZ’s 6 million customers which are served through the bank’s more than 680 branches and over 2,300 ATMs, as well as digital distribution channels.
About Zurich Insurance Group
Zurich Insurance Group (Zurich) is a leading multi-line insurer that serves its customers in global and local markets. With about 54,000 employees, it provides a wide range of property and casualty, and life insurance products and services in more than 210 countries and territories. Zurich’s customers include individuals, small businesses, and mid-sized and large companies, as well as multinational corporations. The Group is headquartered in Zurich, Switzerland, where it was founded in 1872. The holding company, Zurich Insurance Group Ltd (ZURN), is listed on the SIX Swiss Exchange and has a level I American Depositary Receipt (ZURVY) program, which is traded over-the-counter on OTCQX.
Our history dates back over 180 years. We are committed to building lasting partnerships with our customers, shareholders and communities in 34 countries in Australia, New Zealand, throughout Asia and the Pacific, and in the Middle East, Europe and America. We provide a range of banking and financial products and services to over 9 million customers. We employ over 50,000 people worldwide.
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