In­surer poised to buy CBA life unit


AIA ap­pears to be ramp­ing up its ex­pan­sion plans through­out Aus­trala­sia, with the pan-Asian in­surer said to be poised to buy Com­mon­wealth Bank’s life in­sur­ance as­sets, worth about $4 bil­lion.

It comes as AIA and Zurich lobbed fi­nal bids to buy Com­mIn­sure and the New Zealand Sov­er­eign life busi­ness by the Thurs­day night dead­line.

As flagged by The Aus­tralian’s Data­room col­umn, AIA was thought to be the most likely group to buy Com­mIn­sure.

Sources yes­ter­day said they be­lieved AIA had won the con­test, as re­ported on­line, al­though those close to CBA did not com­ment.

It is thought Com­mIn­sure and the New Zealand Sov­er­eign busi­ness are both be­ing bought by AIA.

The at­trac­tion of CBA’s Aus­tralasian life in­sur­ance op­er­a­tions for AIA is be­lieved to be the op­por­tu­nity it pro­vides to gain ac­cess to the bank’s client base.

AIA has been per­form­ing strongly in Aus­tralia, de­spite los­ing one ac­count to BT Fi­nan­cial Group.

But the in­surer is said to have been strug­gling re­cently to lift the per­for­mance of its Vi­tal­ity loy­alty pro­gram, and boost­ing its client base is thought to be a way to of­fer sup­port.

AIA is un­der­stood to be work­ing with Deutsche on the ac­qui­si­tion, while Zurich is with Credit Suisse.

US-based MetLife is be­lieved to have shown some early in­ter­est in the New Zealand as­sets, tak­ing ad­vice from Mor­gan Stan­ley.

CBA has been work­ing on the life in­sur­ance sale with ad­viser JPMor­gan.

The bank is sell­ing its Com­mIn­sure unit af­ter it was in­ves­ti­gated by the Aus­tralian Se­cu­ri­ties & In­vest­ments Com­mis­sion over a num­ber of is­sues.

ASIC this year in­ves­ti­gated con­cerns Com­mIn­sure’s ad­ver­tis­ing and pro­mo­tion of life in­sur­ance poli­cies con­tained “po­ten­tially mis­lead­ing or de­cep­tive in­for­ma­tion” in the pe­riod be­fore March last year.

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