The move comes after CBA revised the terms and conditions of its divestment of CommInsure Life with AIA back in August.
CBA has received an upfront payment from AIA of $500 million and the full economic interests associated with CommInsure Life (excluding the group’s 37.5 per cent equity interest in BoCommLife Insurance Company Limited) have been transferred to AIA, with AIA obtaining an appropriate level of direct management and oversight of the business, according to a statement.
The 25-year Australian distribution agreement between CBA and AIA is also effective from today.
Further, the Colonial Mutual Life Assurance Society Limited, the key life insurance entity of CommInsure Life, has also implemented reinsurance arrangements that are expected to result in a distribution to CBA in the first half of financial year 2020.
“We are excited by the opportunity to bring together the strengths of AIA and CommInsure Life and are working hard with our partner to develop a new generation of products for CBA’s customers, which will deliver excellent customer outcomes,” said CBA chief executive Matt Comyn.
AIA Australia and New Zealand chief executive Damien Mu said the deal is a transformative one that further strengthens AIA’s market position as well as its ability to drive change and new initiatives in the industry.
“There is a transformation happening across the industry where insurers have to become much more connected, to understanding customer needs and being able to engage customers with a holistic and integrated life, health and wellbeing proposition,” Mr Mu said.
Elsewhere in another report, AIA are quoted as saying “the acquisition will also allow AIA to reach CBA’s customers with its expanded value proposition focused on life, health and wellbeing”.
What does reaching “CBA’s customers with its expanded value proposition” actually mean. Perhaps, in light of the judgement handed down this week on Westpac at ASIC’s instigation, should IFA Magazine contact AIA and ask whether or not this “promise” will be delivered on a General Advice basis by AIA, after ringing existing CBA clients with whom it has no pre-acquisition relationship” Are the hawking rules breached?
This will only be bad for industry. More market share, less claims being approved and higher premiums.
Great move by CBA to rid this great company of the burden that is financial planning and shonky advice and rulings.
Banks in life insurance? Always better at lending money than giving it, in the form of claim payments.