The major bank has confirmed that it has completed the sale of Westpac Life Insurance Services to TAL Dai-ichi Life Australia.
TAL confirmed that all of Westpac’s life insurance business and all existing Westpac Life policies have now been transferred, with 345 Westpac Life employees also joining the business.
The terms of the acquisition, originally announced in August last year and completed on Monday August 1, remain unchanged, with Westpac saying it expects to report a total after-tax loss on the sale of around $1.37 billion, of which $270 million was committed to its fiscal year 2021 results.
A loss of approximately $1.10 billion after tax will be classified as a notable item in its FY22 results, primarily relating to the difference between the sale proceeds of $900 million and the book value of the assets. net of the company.
“This sale is another important step in simplifying our business,” commented Westpac’s General Manager of Specialty Businesses Jason Yetton.
“We have now completed the exit of Westpac from insurance underwriting following the sale of our general insurance and lenders’ mortgage insurance business in Australia, as well as life insurance in New Zealand.”
Westpac will also receive ongoing payments under its exclusive 20-year strategic alliance with TAL for the supply of life insurance products to Westpac’s Australian customers.
“Completing the acquisition of the Westpac Life business, alongside the strategic alliance with Westpac, is another important step towards TAL’s goal of protecting more Australians in a variety of ways, throughout their lives. “said Brett Clark, CEO and Managing Director of TAL Group.
“TAL and Westpac share a strong belief in the role and value of life insurance in the community. We look forward to working with Westpac as part of our partnership to provide Westpac customers with access to high quality life insurance solutions that meet their diverse needs at different stages of life.
Westpac added that the completion of the transaction adds approximately 17 basis points to its Common Equity Tier 1 capital ratio.
“Life insurance is an important product for many of our customers and I am pleased that we are continuing to support them by partnering with TAL, a leading life insurer that already provides life insurance to over 4, 5 million Australians,” Mr Yetton concluded.
In July 2021, the big four banks confirmed they had sold Westpac Life-NZ-Ltd to New Zealand’s largest local life insurer, Fidelity Life Assurance Company, for $373 million.
Speaking at the time, Westpac CEO Peter King noted – as was the case with the acquisition completed this week – that the move was all about simplification.
“This transaction is the final step in simplifying our business while continuing to help customers with their life insurance needs,” Mr. King said.
[Related: Westpac to launch digital mortgage this year]