Westpac has completed the sale of its New Zealand life insurance business, Westpac Life-NZ, to NZ’s largest local -owned life insurer, Fidelity Life, for $400 million.
As part of the deal, Westpac Life will be renamed Fidelity Insurance and become party to a 15-year life insurance distribution agreement with Westpac NZ, which will see the NZ bank distributing Fidelity Insurance products to its retail customers for the next 15 years.
The transaction was first announced in July 2021 and the terms of the sale remain unchanged.
Funding the majority of the sale was Fidelity Life’s largest shareholder, the NZ Super Fund, and new investor Ngāi Tahu Holdings.
Westpac said it expects a $98 million post-tax gain on sale, subject to finalisation of completion adjustments and separation costs. The figure will be included in Westpac’s first-half 2022 results. The sale adds approximately 8.0 basis points to Westpac’s common equity tier-1 capital ratio.
“This transaction is a further step in the simplification of our business,” said Catherine McGrath, Westpac New Zealand CEO. “The sale of the New Zealand life insurance business to Fidelity Life ensures that our customers will be well supported by a local specialist.”
“We officially welcome around 50 new team members, 150,000 customers, a new large shareholder in Ngāi Tahu Holdings, and a new strategic alliance partner in Westpac NZ to the Fidelity Life whanau,” said Melissa Cantell, Fidelity Life CEO. “Completing this acquisition is an important step towards our aspiration to reimagine life insurance for New Zealanders. It will allow us to leverage the investments we’re making in data and technology, dial up our strong New Zealand brand even further, and ultimately help more New Zealanders get the benefits of insurance protection.”
The sale does not affect existing life insurance policies.
