As part of its FY18 results, Suncorp has announced that it has entered into a non-binding Heads of Agreement to sell its Australian life insurance business to TAL Dai-ichi Life Australia for approximately $725 million.
As part of the proposed transaction, Suncorp will enter into a 20-year strategic alliance agreement with TAL to provide life insurance products through Suncorp’s Australian distribution channels, including its digital channels, contact centres and store network.
Michael Cameron, Chief Executive Officer (CEO) and Managing Director of Suncorp, explained that the sale of the life company will simplify Suncorp’s business model and provide a significant release of capital, which will be returned to shareholders, and will be accretive to Cash ROE in FY19.
“The long-term strategic alliance between TAL and Suncorp will allow us to offer excellent value to Suncorp’s Australian customers,” said Cameron. “The strategic alliance will leverage the strengths of our respective organisations to deliver a superior customer experience,” Mr Cameron said.
“We are pleased to be working with one of Australia’s leading life insurers with the backing of a successful global insurer in Dai-ichi Life,” he added.
Suncorp said the transaction follows a comprehensive strategic review of its Life insurance business, and is expected to be completed by the end of 2018, subject to conditions and approvals in Australia and Japan.