Commonwealth Bank of Australia (CBA) has announced the sale of its Australian general insurance business.
The bank confirmed on Monday that it has entered an agreement to sell its CommInsure General Insurance to the Hollard Group and “establish an exclusive 15-year strategic alliance with Hollard for the distribution of home and motor vehicle insurance products to CBA’s retail customers in Australia”.
“The transaction is consistent with CBA’s strategy to deliver differentiated customer propositions and the best integrated digital experiences,” CBA chief executive, Matt Comyn, said.
“CBA and Hollard will co-invest in innovative, market-leading products and services that anticipate and meet the changing needs of our customers.”
The transaction consideration includes $625 million of upfront consideration and is expected to deliver an increase of approximately $400 million of common equity Tier 1 (CET1).
“We are incredibly excited by today’s announcement. The synergies between CBA and Hollard extend well beyond strategy and market segmentation,” Hollard Holdings Australia managing director, Richard Enthoven, said.
“We have a shared vision for the future of home insurance, the potential for better customer outcomes, and an exciting role for digital innovation along our entire value chain.”
Completion of the transaction is expected to be completed by mid-2022 pending APRA approval.
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