Westpac has sold its general insurance business as it looks to simplify its operations after a horror year of regulatory action and executive departures.
Westpac will sell its general business to Allianz for $725 million – a multiple of 1.3 times financial year 2020 gross written premium – and enter into an exclusive 20-year agreement for the distribution of general insurance products to Westpac customers.
“This transaction is another step in simplifying our business while continuing to help customers with their general insurance needs,” said chief executive Peter King.
“General insurance products are important for many Australians and we are pleased to be entering a long-term partnership with a global insurance expert to continue to help customers protect the things they value.”
The new arrangement will expand the existing partnership with Allianz, which has seen Westpac distribute its auto, travel, boat and business insurance products since 2015. Westpac had around 550,400 policies in force and gross written premium of $555 million in 2019.
The transaction includes contingent payments subject to integration milestones and business performance over the next five years, as well as ongoing payments with the distribution agreement, and is expected to occur in the second half of 2021.