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Suncorp Group (ASX: SUN) has sold its New Zealand life insurance business Asteron Life for NZ$410 million ($375.5 million) in the latest move by the Brisbane-based banking and insurance group’s bid to simplify its business.
Suncorp, which earlier this year secured a regulatory green light for the $4.9 billion sale of its banking arm to ANZ Banking Group (ASX: ANZ), has sold Asteron Life to global life insurance group Resolution Life.
The sale comprises an upfront payment of NZ$250 million ($229 million) with the balance to be paid 18 months after completion. Suncorp notes that the balance will accrue debit interest for Resolution Life.
Resolution Life has operations in Bermuda, the US and UK as well as Australia and New Zealand. Its Australasian business, which has about 1.1 million customers and about $28.4 billion in assets under management, is described as serving the mature life insurance markets of Australia and New Zealand by “buying portfolios of existing life and savings policies from established insurers that want to free up capital”.
Suncorp’s New Zealand life insurance business delivered a profit after tax of NZ$50 million ($45.8 million) in FY23 - up NZ$35 million from a year earlier with the result supported by what Suncorp described as “growth in planned profit margins and favourable market adjustments”.
The acquisition, which is expected to be completed within nine months, remains subject to regulatory approvals from the Reserve Bank of New Zealand, the Overseas Investment Office and Commerce Commission.
Suncorp anticipates Asteron Life will continue operating under the Asteron brand with the same management team, while supporting advisers and their customers with the same local New Zealand team.
“In addition to supporting existing customers, Resolution Life will continue to grow new business in New Zealand through the Asteron Life brand, providing customers with greater access to contemporary products,” says Suncorp Group CEO Steve Johnston.
“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. We believe it is a win-win for our stakeholders.
“We have simplified our portfolio in recent years under a strategy designed to align everyone at Suncorp around improving the way we deliver value for our Australian and New Zealand customers.”
Johnston says that despite the sale, Suncorp remains committed to the New Zealand general insurance market “as part of our refocused group”.
Suncorp’s New Zealand CEO Jimmy Higgins says the transaction was in the best interests of Asteron Life’s policyholders and allowed the New Zealand team to focus exclusively on general insurance.
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