CBA has announced that it has divested its life insurance businesses, CommInsure and Sovereign (New Zealand), to AIA Group for $3.8 billion.
Annabel Spring, group executive for wealth management at CBA, will leave the bank in December as a result of the sale.
Current CFO of international financial services Michael Venter has been appointed chief operating officer of wealth management and will take Ms Spring’s place in the group executive committee following her departure.
In addition, CBA has announced a strategic review of Colonial First State Global Asset Management, including a possible IPO.
The sale of CommInsure and Sovereign also includes a 20-year partnership with AIA for the provision of life insurance products to customers in Australia and New Zealand.
The divestment of the businesses will net $3.8 billion for CBA, a multiple of 16.9 times 2017–18 pro forma earnings and 1.1 times the embedded value of CommInsure and Sovereign.
The transaction is expected to release approximately $3 billion of common equity tier 1 (CET1) capital and result in a pro forma uplift to the group’s CET1 ratio of approximately 70 basis points.
The sale does not include general insurance, and CBA will retain the CommInsure brand.
This is concrete evidence AGAIN that the smartest business brains in the country can see what a joke financial planning is as a business model. The days are over for these big models. You can’t make money AND be compliant. You are either a slave to compliance, education and red tape or you sell out. You financial planners have allowed your industry body to destroy your business and your future.
There will still be the likes who are exceptional sales people who will manage to stay afloat by being great networkers or people managers and able to just keep doing what they are doing but eventually even they will die by the sword. Compliance and questionable sales practices will line the pockets of the usual law firms who will make you their next meal ticket. The industry is a joke. Good luck, you will need it!
Banks should have never owned insurance companies ! … they got in with their greedy mitts to make $$ and when the things dont go well they offload and stuff up the whole industry.
Isn’t it gratifying that the Adviser Commissions of Australians have been reduced by the government to make local firms more attractive to overseas buyers. First NAB now Comminsure and no doubt more to come, together with reduced competition.
When CBA bought CMLA back in 2000, it was a slippery slope and it’s ‘legacy’ was doomed.
Hope I’m around long enough to see CBA start a new life insurance company or buy one at an inflated price down the track !!!
I’ll start by saying I’m a fan of CommInsure , nothing but good experiences. I do think there needs to be more governance on how 1 group of people (the board) can make a decision to sell a 100 year old business. I find it really disappointing.