Zurich Financial Services Australia Limited has acquired ANZ’s insurance business, OnePath.
The two companies announced this morning that Zurich had entered into an agreement to acquire the OnePath life and consumer credit insurance business (OnePath Life) from ANZ for $2.85 billion, inclusive of an upfront reinsurance commission.
The two companies said the transaction, which is subject to regulatory and other approvals, would create the platform for a significant expansion of Zurich’s distribution footprint, via a 20 year agreement for the distribution of life insurance products through ANZ’s bank distribution channels, and an opportunity to establish a strategic alliance with IOOF.
The deal will also see Zurich secure a strong position in the Australian group life segment.
Commenting on the transaction, Zurich’s regional chief executive, Asia Pacific, Jack Howell said the company’s global leadership had earmarked the Asia Pacific region to be a major engine of growth for the Zurich Group, and the OnePath opportunity allowed it to accelerate that growth by building on the recent acquisitions of Macquarie’s life insurance business and the Cover-More Group.
“Importantly, we are acquiring a profitable business with loyal customers and a track record of strong, stable cash flows,” he said.
Zurich’s Australian Life and Investments chief executive, Tim Bailey said the acquisition would enhance the firm’s scale in Australia and increase its capability across the retail, group and direct segments.
“Securing a long-term partnership with one of Australia’s largest banks and an opportunity to establish a strategic alliance with the second largest advice business in the market will provide us a fantastic base for continued growth and reflects our ongoing belief in, and commitment to, the value of financial advice,” he said.
The announcement said that both the OneCare range, and Zurich’s own Wealth Protection range would remain core offerings.
The transaction is expected to be completed late next year, with affected ANZ employees being transitioned to Zurich.