Zurich Insurance Group has announced the completion of its acquisition of ANZ’s life insurance business, OnePath Life, for AU $2.85 billion (US $2.14 billion).
The transaction, which was first announced in December 2017, will provide Zurich with up to 6 million new customers in Australia, leaving it with a market share of 20% in retail life and 6% in the local group life market.
As part of the deal, Zurich’s existing independent financial adviser (IFA) and bank distribution channels in Australia will be broadened by a 20-year agreement with ANZ to distribute life insurance products through bank channels.
In May 2018, Zurich finalised its reinsurance arrangements with ANZ, paying $1 billion of upfront reinsurance commission as the first step in its acquisition.
The arrangement provides Zurich’s business with access to ANZ’s customer base served through more than 630 branches, and additional capabilities in independent distribution channels.
“Zurich is strengthening its business in Australia and we can now engage with up to 6 million new customers with this acquisition of One Path Life and the access to ANZ’s distribution channels,” said Mario Greco, Group Chief Executive Officer of Zurich.
“Asia Pacific is a key region for Zurich and this deal adds further complementary products and additional bancassurance distribution capacity in the region,” he continued.
“OnePath Life’s retail business, focused on protection and savings products, is perfectly aligned with our strategy in life insurance and should further add to our strong cash remittances.”
Zurich has taken steps to improve its overall business mix and strengthen its customer focus after outlining a strategic three-year plan in November 2016.
During this time, the group has used an M&A strategy to build its geographic focus, releasing capital through the exit of a number of non-core businesses, while reinvesting in a series of bolt-on acquisitions.