Deal or no deal? It’s the million-dollar question – or should we say, billion-dollar? Now, I love a good deal as much as the next person, but this one’s particularly spicy. While there’s no Andrew O’Keefe or sequined women in sight, this week in insurance news we saw a huge acquisition in the insurance industry. Zurich has acquired ANZ’s life insurance business for a grand total of $2.85 billion.
Now let’s get down to the nitty gritty. According to Insurance Business, the sale is made up of two transactions, inclusive of $1 billion of upfront reinsurance commission from Zurich, with the remaining balance paid on completion of the deal.
The transaction will see Zurich take on 100 per cent of ANZ’s One Path Life Insurance.
So why is this such a huge deal for Zurich? Well, it now makes Zurich the largest retail life insurance firm in the country. It’ll have more that 1.5 million customers, as the international giant owns a whopping 19 per cent share of the Australian life insurance market.
According to a statement from OnePath Life Insurance, “The deal will see two true insurance specialists come together to create Australia’s number one retail life insurer and reinforces Zurich’s commitment to financial advisers as valued business partners. It will introduce exciting opportunities for Zurich to invest in new ways to make life insurance more relevant, engaging and accessible to Australians.”
The deal gives the Swiss insurer the top spot in a market attractive to global players, due to its robust economy and low penetration, says Reuters. Zurich will also enter into a 20-year distribution agreement with ANZ in Australia to distribute life insurance products via bank channels.
So, all in all, the ‘deal’ decision seems to be a promising one. It might just be that lucky green $200,000 suitcase hiding in plain sight.
Words by Skye Jamieson