Zurich Australia will purchase the life insurance business of the Macquarie Group – Macquarie Life – with the deal expected to be completed by the second half of this year.
The two groups announced they have entered into an arrangement, but have not disclosed the terms, which will see Macquarie Life’s Australian-based staff transferring to Zurich once the deal has passed regulatory and court approvals.
Zurich Asia Pacific, Global Life, Chief Executive Colin Morgan said Zurich’s Australian life business had grown strongly in the past five years and the group’s growth strategy in the Asia Pacific region would be accelerated by the acquisition of Macquarie Life.
Zurich, Life and Investments, Chief Executive Tim Bailey said the acquisition would enhance Zurich’s scale and overall capability with the first priority to provide staff and customers of Macquarie Life with certainty and continuity.
Current Macquarie Life policyholders will become customers of Zurich, which will honour all obligations under new and existing policies, but Macquarie Life products will still be sold to new customers under the Macquarie brand up until the completion of the sale.
Macquarie, Head of Banking and Financial Services, Greg Ward said the Macquarie Life, which is part of its Banking and Financial Services Group was a well performing business and “the sale of the business reflects the need for significant scale in the capital intensive life insurance industry in order to drive appropriate returns.”
“Zurich’s expertise, global reach and customer focus mean they are ideally positioned to continue providing high quality insurance products and services to Macquarie Life customers.”
The really pertinent question is will Zurich retain the suit of Mac Policies and provide these products following the sale.
Will they retain the pricing we have provided to our clients in good faith? (having just endured and continue to convince clients to maintain policies with a 15% increase) or will they raise them to fit in with their current pricing.
And will Zurich integrate the entire Mac book of business into the Zurich mold as MLC have done with the Aviva/Protection First range and AMP with the AXA range, ultimately providing an expensive option for our clients’ future protection – with increases in rates due to a non-profitable book borne by the clients who have had health changes over the years which will sit inside YET ANOTHER legacy fund!
Lets see how Best Interest Duty Plays out here over the coming couple of years…. advisers beware of changes without an incredibly good reason ……price alone might not justify change.
I’ve a hunch we will only need an AMP or MLC mirror not a crystal ball to figure out how this will unfold.
**wasn’t the Govt looking into the issues of legacy funds’ as part of the current review??
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