AIA has partnered with Commonwealth Bank’s life insurance business to operate as one entity as it waits for its purchase of CommInsure Life to be completed.
The $2.37 billion deal cannot be finalised until CBA sells its 37.5 per cent stake in Chinese insurer BoCommLife to Japanese insurer Mitsui Sumitomo which has been delayed by China’s banking regulator. CBA earlier this year ringfenced the BoCommLife deal and entered into a joint cooperation agreement with AIA so that they could start to merge operations.
The deal between AIA and CBA includes reinsurance arrangements, partnership milestone payments and a 25-year strategic distribution agreement.
AIA and Australia’s largest bank are also progressing a potential statutory asset transfer as an alternative approach to completing the acquisition.
AIA said the partnership would deliver significant strategic benefits and enhance its competitive advantage in an underinsured Australian market and give access to CBA’s customer base as it focuses on life, health and wellbeing. The insurer said it is making significant investments in health and wellbeing programs to modernise life insurance in Australia.
“This is a transformative deal that further strengthens AIA’s market position, and with it our ability to drive change and new initiatives in the industry,” said AIA Australia and New Zealand chief executive Damien Mu. “Together we will work to achieve our purpose to make a difference in people’s lives, and to champion Australia and New Zealand to be the healthiest nations in the world. This will be achieved through our customer-led, strong life, health and wellbeing proposition, as well as our market-leading programs such as AIA Vitality and our Rehabilitation and Return to Work program.”