Suncorp offloads New Zealand life insurance business in $375m deal

The financial services group will mark its exit from life insurance after selling its New Zealand business, almost six years after offloading its Australian operation.

BRISBANE, AUSTRALIA - NewsWire Photos - FEBRUARY 20, 2024. People walk past a Suncorp BankÕs branch in Brisbane. A tribunal has authorised the $4.9 acquisition of SuncorpÕs banking arm by ANZ Bank. Picture: Dan Peled / NCA NewsWire

Suncorp will offload its New Zealand life insurance business in a $NZ410m ($375m) deal that marks the final exit from the sector by the ASX-listed insurer and another simplification of the financial services group.

The deal, which sees Suncorp sell its Asteron Life business to Resolution Life, but does not change Suncorp’s overall exposure to the general insurance market in New Zealand.

The sale will see Suncorp book an upfront $NZ250m at the completion of the deal, with the remainder of the potential sale figure to be earned out over the following 18 months, with interest to be paid on the outstanding balance.

Suncorp group chief executive Steve Johnston pitched the sale as a further simplification of “our portfolio” coming on the heels of the sale of Suncorp Bank in a $4.9bn deal with ANZ.

Mr Johnston said the sale was part of a “strategy designed to align everyone at Suncorp around improving the way we deliver value for our Australian and New Zealand customers”.

“The transaction continues the reshaping of the Suncorp Group, and positions both the general and life insurance businesses for ongoing growth and success – benefiting employees, customers, and other stakeholders,” he said.

“We believe it is a win-win for our stakeholders.”

However, the transaction will be subject to regulatory approvals from the Reserve Bank of New Zealand, and the Overseas Investment Office and Commerce Commission. It is expected to take nine months.

Suncorp said the transaction will see no overall change to the Asteron Life business, and it will continue to operate under the Asteron Life brand and will keep its management team.

Suncorp said Asteron Life will also remain open to new business.

Suncorp New Zealand CEO Jimmy Higgins said the transaction would allow the business to “focus exclusively on general insurance” in the New Zealand market.

Resolution Life is among the largest global life insurers, with almost 14 million policyholders and almost $377bn in assets.

It boasts business in Bermuda, the UK, the US, Australia, and New Zealand.

Suncorp’s sale of its New Zealand life insurance business comes after the group offloaded its Australian business in 2018.

That deal saw Suncorp book $725m after global life insurer TAL Dai-ichi, snapped up the business after a comprehensive review of the Queensland based group.

As part of the deal Suncorp entered into a “20-year strategic alliance” with TAL to provide its life insurance products through the Suncorp distribution channels.

Shares in Suncorp lifted 0.7 per cent to $16.46 by midday.