Zurich enters agreement to acquire OnePath Life

  • Zurich to become #1 in retail life insurance
  • Significantly expands distribution footprint via long term distribution agreement with ANZ
  • OnePath brand and OneCare range to remain core Zurich Financial Services Australia Limited (Zurich) has entered into an agreement to acquire the OnePath life and consumer credit insurance business (OnePath Life) from ANZ for $2.85b AUD, inclusive of an upfront reinsurance commission.

Tim Bailey

The transaction, which is subject to regulatory and other approvals, will see Zurich meeting the protection needs of more than 1.5 million customers, and becoming Australia’s largest retail life insurer as measured by inforce premium.

The transaction also creates the platform for a significant expansion of Zurich’s distribution footprint, via a 20 year agreement for the distribution of life insurance products through ANZ’s bank distribution channels, and an opportunity to establish a strategic alliance with IOOF.

The deal will also see Zurich secure a strong position in the Australian group life segment.

Mr Jack Howell, Zurich’s Regional CEO Asia Pacific, said, “Our global leadership has earmarked the Asia Pacific region to be a major engine of growth for the Zurich Group, and this opportunity allows us to accelerate that growth by building on our recent acquisitions of Macquarie’s life insurance business and the Cover-More Group.

“Importantly, we are acquiring a profitable business with loyal customers and a track record of strong, stable cash flows,” he said.

Mr Tim Bailey, CEO of Zurich’s Australian Life and Investments business, said, “In Australia, this acquisition will enhance our scale and capability across the retail, group and direct segments, and opens up important new distribution channels for us.

“Securing a long term partnership with one of Australia’s largest banks and an opportunity to establish a strategic alliance with the second largest advice business in the market will provide us a fantastic base for continued growth and reflects our ongoing belief in, and commitment to, the value of financial advice.

“Both the OneCare range, and Zurich’s own Wealth Protection range remain core offerings.

“This deal sees two true insurance specialists come together, and opens up exciting opportunities for us to invest in new ways to make life insurance more relevant, more engaging and more accessible to Australians,” said Mr Bailey.

“It also makes us the number one retail life insurer in Australia, and we look forward to extending our award-winning proposition to a much expanded customer base,” he added.

Another of Zurich’s priorities is to provide certainty and continuity to ANZ employees affected by the transaction. Upon completion of the sale, expected to be late 2018, in scope employees will transition across to Zurich.

“We are excited about the opportunity to bring two highly talented teams together. OnePath Life is a blue-chip life insurance brand with a long heritage in the Australian market and an experienced, well regarded team,” added Mr Howell.

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