Australian bank and financial services provider Westpac has agreed to sell its life insurance business to TAL Dai-ichi Life Australia, a subsidiary of Japanese life insurer Dai-ichi Life Group, for A$90m (£47.6m).
In a statement released to the Australian Stock Exchange, Westpac revealed the deal sees it exit manufacturing life insurance products and enter an exclusive 20-year strategic alliance with TAL to provide life insurance products to Westpac’s Australian customers.
Westpac will retain responsibility for certain pre-completion matters and provide protection to TAL through a combination of provisions, warranties and indemnities.
Westpac’s total accounting loss on the sale of the business is around A$1.3bn.
The deal is subject to a number of regulatory approvals and it is expected to complete in the second half of next year.
The sale follows other steps Westpac has taken to simplify its business portfolio which has included the sale of its lenders mortgage insurance, Westpac Pacific, Auto Finance and New Zealand life insurance businesses along with the recently completed separation of its general insurance and vendor finance businesses.
Commenting on the deal, Westpac group chief executive specialist businesses and group strategy Jason Yetton said: “Life insurance is an important product for many Australians and this sale provides certainty for customers and new opportunities for our people with TAL.
“TAL already offers insurance products to more than 4.5m Australians and is well placed to help Westpac’s customers protect the people they love.”