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‘High interest’ in CommInsure sale: Narev

‘High interest’ in CommInsure sale: Narev

Tim Stewart
— 1 minute read

The Commonwealth Bank looks set to exit the manufacturing of life insurance in a move that would free up a substantial amount of regulatory capital for the business.

CommInsure is firmly in the shop window, with CBA announcing in its results presentation yesterday that it is in discussions with a "range of third parties" regarding the business.

In its annual result announcement, which revealed a better-than-expected $9.88 billion profit, CBA said the outcome of the discussions about CommInsure remain "uncertain", with divestment, a reinsurance arrangement or retained ownership all still possible.

Talking about the possible sale of CommInsure yesterday, CBA chief executive Ian Narev said the distribution of life insurance is "absolutely critical to the vision of the Commonwealth Bank".

He said Annabel Spring and Vittoria Shortt (CBA's group executives for wealth management and marketing/strategy, respectively) have considered a "raft of strategic options" for the life insurance business.

"As the team continued to do this work, what became apparent was that there is some appetite in the broader insurance world for having a discussion with us and there are people who are very interested in the business," Mr Narev said.

"We have specifically said that the outcome is uncertain, but what we do know is that there are people that have a view that it's a very good business and have a very high level of interest in it, and we'll see whether the minds will meet on it."

Speaking to analysts yesterday, Mr Narev said there is a "decent inference" to be made that the sale of CommInsure would have a significant "capital benefit" for CBA's balance sheet.

"We're in discussions and the outcome is uncertain and all of this stuff is very commercially sensitive," he said.

 

‘High interest’ in CommInsure sale: Narev
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