ANZ New Zealand has announced the sale of OnePath Life NZ to specialist insurance provider Cigna Corporation for NZ$700 million.
OnePath Life policyholders in New Zealand will continue to receive the cover they hold under the terms of their policies, according to a statement released by the bank, which added that OnePath Life staff would be offered similar roles with Cigna or ANZ, and the investment management business of the latter was not part of the sale.
ANZ New Zealand Chief Executive, David Hisco said a 20-year strategic alliance where Cigna will provide insurance solutions for ANZ bank customers was included in the sale agreement.
“Under this agreement, ANZ will continue to provide life insurance to our customers but these insurance policies will now be manufactured and managed by a world-class insurance provider in Cigna,” Hisco said.
“This is consistent with how we provide motor vehicle, home, commercial and travel insurance using a range of specialist insurance partners,” he added.
The transaction represents a slight premium to embedded value and is expected to generate a gain on sale of around NZ$50 million, increasing ANZ Group’s Level 1 and Level 2 CET1 ratios by ~5 basis points and ~15 basis points respectively.
Cigna has been in operation in New Zealanders for a century and offers insurance products online via direct marketing and provides insurance products for partner companies, which has included ANZ for over 20 years.
Cigna New Zealand Chief Executive, Gail Costa, said the acquisition and strategic alliance diversified Cigna’s distribution capabilities: “Cigna provides simple, affordable insurance products to meet the needs of its customers. This acquisition will enable us to provide broader solutions and be more agile and responsive to a larger customer base.”
The deal, which is expected to be completed in 2019, is still subject to regulatory approval.
