Zurich to acquire ANZ life business

Zurich Insurance Group (Zurich) has announced that it has entered into an agreement to acquire 100 percent of ANZ’s life insurance businesses, OnePath Life, in Australia for AUD 2.85 billion (USD 2.14 billion). Both parties expect the transaction, which is subject to regulatory approval, to be completed by the end of 2018.

The transaction price comprises AUD1 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 Mario Greco, group chief executive officer.

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. The transaction is also expected to increase the level of overall cash remittances over the 2017-2019 planning period by AUD300 million (USD225 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.