Allianz Australia to merge former Westpac operation into new entity

The company is preparing to overhaul its corporate structure by transferring all of its insurance operations, including a former Westpac business, into its main operating entity.

Allianz Australia will simplify its corporate structure by merging the former Westpac general insurance business into its main operating entity.

In a company notice published in newspapers and online on Tuesday, the group said it was reorganising its corporate structure to transfer its general insurance portfolio to an entity called Allianz Australia Insurance.

The portfolios to be transferred are all products in run-off and comes after Allianz bought Westpac’s insurance operation for $725m in 2021.

Allianz has spent the last two years transferring new business written under the Westpac brand to its main insurance operating entity.

The former Westpac entity no longer issues new policies or renewals.

The insurance will now transfer the remainder of the former Westpac insurance business, which mainly represents consumer credit insurance products, to the new entity.

Allianz boss Richard Feledy. Picture: Chris Pavlich/The Australian

Allianz said it would make an application to the Federal Court to confirm the transfer, set to take effect around September 1.

The move is aimed at simplifying the corporate structure for Allianz, which writes more than $6.5bn in business in Australia, the fourth-largest operator in the local market.

An Allianz spokeswoman said there would still be “complete consistency from a customer point of view, with contact details, claims processes and policy terms and conditions remaining the same as they are today”.

Despite the transition, Allianz will retain the Westpac brand under the terms of the deal signed with the bank in 2021.

Allianz snapped up Westpac’s insurance business in July 2021 in a $725m deal, in a deal priced at 8-to-12 times earnings of the insurer. Almost 350 Westpac insurance staff joined the business under the deal.

Under the deal, Allianz entered into a 20-year exclusive agreement for the distribution of general insurance products, including motor, home, and travel cover to Westpac customers.

Westpac has sold all of its insurance assets, moving to offload its life insurance business to TAL in August, which saw Westpac book a $1.37bn loss.

The bank sold its lenders mortgage insurance to Arch Capital Group.

A note to investors from Macquarie said insurance pricing was still running at double-digit levels in the June quarter, topping 10.9 per cent in home risks policies.

Macquarie analysts found premiums for small and medium enterprises hit 14.4 per cent on commercial cover.

“While customer retention remains at all-time highs across most products, repricing trends should be positive for insurers. We maintain our positive outlook for the sector,” the Macquarie analysts said.