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TAL confirmed that all of Westpac’s life insurance business and all existing Westpac Life policies had now been transferred, with 345 Westpac Life employees also joining the firm.
The terms of the acquisition, which were originally announced in August last year and were completed on Monday (1 August), remain unchanged, with Westpac stating that it expects to report a total after-tax loss on sale of approximately $1.37 billion, of which $270 million was incurred in its financial year 2021 results.
A loss of approximately $1.10 billion after tax will be classified as a notable item in its FY22 results, which primarily relates to the difference between the sale proceeds of $900 million and the carrying value of net assets in the business.
“This sale is another important step in simplifying our business,” commented Westpac specialist businesses chief executive, Jason Yetton.
“We have now completed Westpac’s exit of insurance underwriting following the sales of our General Insurance and Lenders Mortgage Insurance businesses in Australia, as well as Life Insurance in New Zealand.”
Westpac will also receive ongoing payments as part of its exclusive 20-year strategic alliance with TAL for the provision of life insurance products to Westpac’s Australian customers.
“The completion of the Westpac Life business acquisition, alongside the strategic alliance with Westpac, is another significant step towards TAL’s goal of protecting more Australians in more ways, throughout their lives,” said TAL Group CEO and MD, Brett Clark.
“TAL and Westpac share a strong belief in the role and value of life insurance in the community. We are looking forward to working with Westpac through our partnership to provide Westpac customers with access to high-quality life insurance solutions that meet their diverse needs throughout different stages of their lives.”
Westpac added that the completion of the transaction adds approximately 17 bps 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 will continue to support them by partnering with TAL, a leading life insurer that already provides life insurance to more than 4.5 million Australians,” concluded Mr Yetton.
In July 2021, the big four bank confirmed it had sold Westpac Life-NZ-Ltd to New Zealand’s largest locally owned life insurer, Fidelity Life Assurance Company, for $373 million.
Speaking at the time, Westpac CEO Peter King noted – as was the case with this week’s completed acquisition – that the decision was focused on simplification.
“This transaction is the latest 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]