ASB Blog

Sale of Sovereign to AIA

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ASB’s and Sovereign’s parent company, the Commonwealth Bank of Australia (CBA), has announced that it has agreed to sell its life insurance businesses in New Zealand (Sovereign) and Australia (CommInsure) to AIA.

As part of the transaction, ASB will enter into a 20-year distribution agreement with Sovereign and AIA for the provision of Sovereign and AIA life insurance products to its customers in New Zealand. Consequently, there will be no change to the partnership ASB has as a distributor of Sovereign’s life insurance products. Sovereign and ASB customers will retain all the current benefits of their existing policies, while benefiting from AIA’s global expertise, innovation capabilities and experience in developing and offering a wide range of insurance products. Insurance remains a key product offering for ASB, and ASB and Sovereign will continue to work together in partnership to provide Kiwis with a comprehensive range of insurance options.

Sovereign CEO Nick Stanhope-says: “This transaction represents the next exciting stage in Sovereign’s evolution. We are the product of several mergers and acquisitions of our own – so the prospect of becoming part of the AIA family, as our industry continues to consolidate globally, is an exciting prospect.

“We remain dedicated to providing our customers with the best products and service and we are confident that this will be a great fit for our customers and our people,” Mr Stanhope says.

The transaction is expected to be completed in 2018, but is subject to certain conditions, including regulatory approvals in both New Zealand and Australia.

FAQs

Why is Sovereign being sold and to who?

Life insurance companies are increasingly being owned by specialist insurers with global scale, as opposed to banks. It's exciting news for us to part of a global life insurance company and benefit from AIA's expertise and experience, to achieve stronger growth and great outcomes for our customers.

AIA are the largest life insurance company in Asia-Pacific, and also have offices in Auckland, Wellington and Christchurch.

As part of the transaction, ASB will enter into a 20-year distribution agreement with Sovereign and AIA for the provision of Sovereign and AIA life insurance products to its customers in New Zealand.

The transaction is expected to be complete in 2018, but is subject to certain conditions, including regulatory approvals in New Zealand, Australia and China.

Is ASB going to stop selling insurance?

No. As part of the transaction, ASB will enter into a 20-year distribution agreement with Sovereign and AIA for the provision of Sovereign and AIA life insurance products to its customers in New Zealand.

Isn't my insurance with ASB?

ASB provides Life, Health and Disability insurances to its customers that are underwritten by Sovereign. ASB will continue to provide these products to our customers in partnership with Sovereign and AIA.

You can be reassured that you will retain all your current benefits as outlined in your policies.

Will the sale of Sovereign affect my current insurance policy(ies) or premiums?

No. The relationship with our customers is governed by our policy documents. A change of ownership does not impact this. Our customers are very important to us and you can be reassured that you will retain all your current benefits as outlined in your policies. Our focus remains on serving our customers – it’s 'business as usual'.

There are no changes planned to our pricing, however we will continue to review premiums regularly, as we always have done.

Do I need to do anything with regards to the partnership with Sovereign and AIA?

No, you don't need to do a thing. You can be reassured that you will retain all your current benefits as outlined in your policies.

For further information regarding CBA’s announcement to the ASX today, please click here.

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