Australasian insurer Suncorp has sold its New Zealand life insurance arm Asteron Life to Resolution Life Australasia for over NZ$400 million – a year after Suncorp NZ denied Asteron Life was up for sale.
Suncorp Group Chief Executive Steve Johnston described the sale as a “win-win” for the insurer’s stakeholders, saying the transaction continues the “reshaping” of the Suncorp Group.
Suncorp NZ has the Vero and Asteron Life brands as well as the joint venture AA Insurance business in New Zealand.
On Thursday morning, the insurer which is listed on the Australian Securities Exchange, announced Asteron Life will be acquired by Resolution Life Australasia, a division of the global insurance group Resolution Life, for NZ$410 million.
Resolution Life says it has approximately NZ$30.4 billion in assets under management in Australia and New Zealand.
An upfront payment of NZ$250 million will be provided by Resolution Life Australasia at the completion of the sale, and the rest of the NZ$410 million will be paid 18 months later. During this time, interest will be earned on the outstanding balance.
The transaction needs approval from New Zealand regulators like the Reserve Bank, the Overseas Investment Office, and the Commerce Commission.
In its announcement, Suncorp says it anticipates that this process will conclude within a nine-month timeframe.
The insurer also says Suncorp’s New Zealand general insurance business will remain unchanged and part of the Suncorp Group.
Suncorp New Zealand Chief Executive Jimmy Higgins says the transaction was in the “best interests” of Asteron Life’s policyholders.
The sale would allow the NZ business to focus “exclusively on general insurance”.
Johnston says Resolution Life will continue to grow “new business” in NZ through the Asteron Life brand, in addition to supporting existing customers.
“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. We remain committed to the New Zealand general insurance market as part of our refocused group,” he says.
The news of Asteron Life’s sale comes just after a year on from Suncorp denying it was interested in selling off its life insurance arm.
In February 2023, Suncorp NZ told interest.co.nz that a report out of the Australian Financial Review’s Street Talk column that Suncorp Group was preparing Asteron Life for sale came from a “gossip column”.
Street Talk had suggested last year that if sold, Asteron Life could fetch between A$500 million to A$600 million, which would leave Suncorp Group as “a pure-play general insurer” across the Tasman.
Suncorp NZ reported a net profit of NZ$94 million in its latest half-year results in February, an increase of 3.3%.
Suncorp NZ’s general insurance (GI) profit after tax was up 6.7% to NZ$80 million but its life insurance profit fell 12.5% to NZ$14 million.
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