- Banking giant Westpac (WBC) is set to sell its general insurance arm to Allianz for $725 million
- The financials stock told investors on Wednesday it will part ways with two of its general insurance branches under the deal
- The sale also carries an exclusive 20-year agreement to distribute insurance products to WBC patrons
- Westpac CEO Peter King said the agreement was “a significant milestone in building a simpler, stronger bank”
- If all goes to plan and regulators approve the sale, Westpac hopes to finalise the transaction in 2021’s second half
- Following the news, Westpac shares increased a slight 0.15 per cent to trade at $20.31
Banking giant Westpac (WBC) is set to sell its insurance arm to Allianz for $725 million.
The financials stock told investors on Wednesday it will part ways with two of its general insurance branches under the deal. The sale also carries an exclusive 20-year agreement to distribute insurance products to WBC patrons.
Westpac’s insurance businesses provide home, contents, and landlord cover to the big four bank’s customers. As of September 30, there were over half a million general insurance policies in force, carrying a combined gross written premium of $555 million.
Westpac forecasts the sale will deliver a small post-tax gain in the current financial year. More broadly, though, it’ll expand its current partnership with European multinational Allianz.
Since 2015, Australia’s oldest bank has sold a range of Allianz’s insurance products, including auto, travel, boat, and business cover.
Westpac Group CEO Peter King said the agreement was “a significant milestone in building a simpler, stronger bank.”
“This transaction is another step in simplifying our business while continuing to help customers with their general insurance needs,” the Chief Executive commented.
“General insurance products are important for many Australians and we are pleased to be entering a long-term partnership with a global insurance expert to continue to help customers protect the things they value,” he continued.
For the deal to go through, regulators need to approve the sale to Allianz. But if all goes to plan, Westpac expects to finalise the agreement in 2021’s second half.
Following the news, Westpac shares increased a slight 0.15 per cent to trade at $20.31 at 11:44 am AEDT.