With the sale of Westpac’s mortgage insurance division to Arch Capital now out of the way, attention turns back to its life insurance business.
A sale of Westpac’s life insurance operations through investment bank JPMorgan has been on the cards for some time, and a process is now understood to be under way.
While Resolution Life and the Bank of America-advised TAL Insurance, owned by Japan’s Dai-ichi, are known to be vying for the business, the understanding is that other Japanese groups are also in the mix.
It is understood that Mitsui has also shown interest and is likely to be in the contest, as is Nippon Life.
Some suspect that TAL is not a serious contender, given that the division has a life insurance agreement with Westpac and Dai-ichi is not big on group life insurance for superannuation funds, which is what the Westpac business offers.
However, the Japanese groups would probably be keen if the distribution agreements remain in place.
When Resolution purchased AMP’s life insurance operation for $3bn last year it worked with Deutsche Bank.
Resolution has a different strategy towards the Westpac life business than the Japanese groups.
It would run the assets off over time, while TAL has growth aspirations.
Resolution Life bought AMP’s life insurance business for $2.5bn and has always been tipped as a logical Westpac Life acquirer.
US-based AIG had been looking to buy the $1.5bn business, but walked away.
Westpac has set up a Specialist Businesses unit overseen by Jason Yetton.
Australia’s big four banks are selling non-core assets as they narrow their focus on mortgages while they wrestle with financial challenges linked to COVID-19, low interest rates and more regulation from the royal commission.
Goldman Sachs is thought to be separately working on the sale of Westpac’s BT wealth management platform.
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