The final leg of the life insurer’s purchase of CBA’s life insurance portfolio has been completed, with one ratings agency predicting the acquisition will bolster its position in the local market.
AIA Australia completed the final part of its acquisition of the Colonial Mutual Life Assurance Society’s (CMLA) insurance portfolio, including products under the CommInsure, Colonial and Commonwealth Financial Services brands, on 1 April.
In a report on Tuesday, ratings agency S&P Global said the purchase would “support AIA’s position in the Australian life insurance market”.
The agency said AIA Australia remained “a highly strategic subsidiary” of its Hong Kong listed parent AIA, and its ratings of the company “continue to reflect the extent of expected extraordinary support from the group”.
S&P currently rated AIA Group and AIA Australia as A+.
The ratings agency said the CommInsure business was “complementary” to the AIA Australia business profile.
“The consolidation of CMLA's insurance portfolio supports AIAA's presence as a leading participant in the Australian life insurance market,” S&P said.
“It also provides long-term access to the customer and distribution network of CMLA's parent, CBA.”
With the joint cooperation agreement between CBA and AIA now at an end, the economic and legal responsibility of policyholders for the CommInsure business lay with AIA while the legal entity remained with CBA.
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