A non-major lender has announced an agreement to sell its Australian life insurance business for approximately $725million.
Suncorp Group has signed a share sale deed with TAL Dai-ichi Life Australia Pty Ltd (TAL). The agreement includes the purchase consideration and adjusted net worth.
The share sale includes a 20-year distribution agreement with TAL to offer market-leading life insurance solutions through Suncorp’s Australian distribution channels, including its digital channels, contact centres and store network.
Under the terms of the alliance, Suncorp will continue to earn income on the distribution of life insurance.
Allowing for separation and transaction costs, provisions and hybrid capital, Suncorp anticipates returning approximately $600million to shareholders following the completion of the transaction.
This is expected to be completed by 31 December 2018, subject to the satisfaction of certain conditions and regulatory approvals in Australia and Japan.
The sale of the Australian life insurance business has no impact on the Suncorp life insurance business in New Zealand.
Last week, the bank hiked its interest rates for the second time in six months.