ANZ NZ sells OnePath Life to Cigna for $700mln

ANZ's New Zealand chief executive David Hisco. Picture/NZ Herald.

ANZ Bank New Zealand says it has sold OnePath Life NZ for $700 million to global insurer Cigna Corp, making it the second local bank to exit the insurance business in less than a year.

The transaction represents a slight premium to "embedded" value and is expected to generate a gain on sale of about $50m, ANZ said.

ANZ New Zealand's Investment Management business is not part of the sale.

The bank's New Zealand chief executive David Hisco said the sale included a 20-year strategic alliance for Cigna to provide insurance solutions for ANZ bank customers and is consistent with ANZ's strategy to simplify its business.

"Under this agreement, ANZ will continue to provide life insurance to our customers but these insurance policies will now be manufactured and managed by a world-class insurance provider in Cigna," Hisco said.

"This is consistent with how we provide motor vehicle, home, commercial and travel insurance using a range of specialist insurance partners."

OnePath Life policyholders in New Zealand would continue to receive the cover they held under the terms of their policies and it was intended all staff involved would be offered similar roles with Cigna or ANZ.

Cigna is a global health service company with 95 million customers and more than 40,000 employees worldwide.

In New Zealand it offers insurance products online and through direct marketing and also provides insurance products for partner companies. Cigna has been one of ANZ's insurance partners for more than 20 years.

The sale is subject to regulatory approval and is expected to be completed in 2019.

Last September ASB's parent company, the Commonwealth Bank of Australia said it had agreed to sell its life insurance businesses in New Zealand and Australia to AIA.

As part of that transaction, ASB said it would 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.