)
Westpac (ASX: WBC) has today agreed to sell its life insurance business for $900 million to TAL Dai-ichi Life Pty Limited (TAL) and has entered into an exclusive 20-year partnership with the new owner for the provision of life insurance products to the Big Four bank's Australian customers.
The transaction signals Westpac’s exit from life insurance products and releases significant capital back to the bank. The total accounting loss on sale is approximately $1.3 billion post-tax, while the transaction will add approximately 12 basis points to Westpac’s Level 2 common equity Tier 1 capital ratio.
A post-tax loss of circa $300 million - reflecting transaction and separation costs - is expected to be realised in the group’s FY21 results. The balance of the loss will be recognised on completion of the sale.
TAL, a fully owned subsidiary of Dai-ichi Life Group, is one of the world’s leading life insurers and a partner that customers can trust according to Westpac chief executive, specialist business & group strategy, Jason Yetton.
“This transaction is another step in simplifying the bank while continuing to help customers with their life insurance needs by partnering with TAL,” says Yetton.
“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 4.5 million Australians and is well placed to help Westpac’s customers protect the people they love.”
Completion of the transaction is subject to various regulatory approvals and is anticipated to occur in the second half of 2022.
)
