Northern Territory sells insurance arm for USD424 million

The Northern Territory has announced plans to sell Australia’s last government-owned insurer Territory Insurance Office to Allianz and People’s Choice Credit Union, in a transaction worth USD424 million.

Global insurance giant Allianz is expected to pay USD236 million for the insurance arm of TIO’s business, while People’s Choice Credit Union will get TIO’s banking arm for USD48 million, according to a report in the Australian Business Review.

A further USD140 million capital drawdown on the Territory’s Motor Accidents Compensation scheme is being counted as proceeds from the privatisation. The scheme will remain in government hands but be managed by Allianz.

Chief Minister Adam Giles said successive governments had been advised to sell TIO, but had lacked the political courage to do so.

“The funds raised through this change of ownership now enable us to invest in the infrastructure we need to unlock the full potential of the Northern Territory, creating jobs and opportunity for our children. They also allow us to do important community flood mitigation work,” he said.

Two recent polls estimated as many as 80 to 90 per cent of NT residents were opposed to the sale. Some government members have spoken out against it, and Country Liberal Party strategists privately warn they fear becoming a one-term government.