AIA Australia has confirmed that it has entered into an agreement to sell its Superannuation & Investments business to Resolution Life Australasia.
The insurer says in a statement that the business was purchased by AIA Australia as part of the acquisition of the Commonwealth Bank of Australia’s life insurance and investments business, known as CommInsure Life (see: AIA Takes Next Step in Process to Acquire CommInsure Life).
It is an established superannuation, retirement and investment solutions provider, with more than $8 billion funds under administration.
AIA Australia CEO and Managing Director Damien Mu says the transaction reflected AIA Australia’s intention to focus on its core business of life and health insurance and wellbeing services.
“Post the integration of CommInsure Life, we commenced the next step of our transformation journey, through which we will create a simpler, faster and more connected AIA,” he says.
As part of this, the company has sought to focus on life, health and wellbeing, “…in order to deliver on our dream of making Australia the healthiest and best protected nation in the world.”
Mu says AIA chose Resolution Life “…because their in-force business model is driven by a dedicated customer focus and the fact that superannuation and investments are a core part of their offering.”
He adds that AIA will now work closely with them to ensure a smooth transition for its people in Superannuation & Investments and the supporting teams, as well as its customers, partners and stakeholders.
AIA Australia noted that there would be no change to the way in which policyholders and customers do business with AIA over the next 12 to 18 months.
Mu says the insurer will continue to focus “…on our purpose of making a difference in people’s lives and living and breathing our operating philosophy of doing the right thing in the right way with the right people.”
The statement says the Superannuation & Investments business will be transferred by way of a statutory asset transfer under Part 9 of the Life Insurance Act 1995 which is expected to complete within 12 to 18 months, subject to receipt of regulatory approvals.
Given the financial performance of AIA this isn’t something to be celebrated. The return on capital is awful and given the performance of the life business due to the strategy of being “best product at best price at all costs” they are now reaping what was sowed.
Total market exit stage one complete. Perhaps Resolution Life will become the largest life insurer in Australia before too long?
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