Aviva purchase makes NAB biggest life insurer

National Australia Bank will become the country's biggest life insurer and investment platform provider after buying Aviva Australia Holdings for A$825 million ($1.1 billion).

NAB bought the business from Britain's Aviva, the world's fifth biggest insurer, beating three other final bidders.

Excluding integration costs, Aviva Australia would add to earnings and return on equity from the first full-year after the acquisition, NAB said yesterday.

"This acquisition will enhance our offering in key wealth management segments including insurance and investment platforms, adding scale, efficiency and new capabilities to our operations," said NAB chief executive Cameron Clyne.

NAB will leapfrog life insurance market leader Commonwealth Bank of Australia and number two provider ING to become the biggest in the country.

NAB also will be the biggest investment platform provider, over rivals such as Westpac Banking Corporation's BT, after buying Aviva's Navigator.

NAB's Aviva takeover, which is subject to approval by the Australian Competition and Consumer Commission, is part of Clyne's refocus on the Australian market as he seeks to reverse the bank's slide in profitability and return to shareholders.

Shares in NAB had gained 18c, or 0.81 per cent, to A$22.28 yesterday.

Aviva Asia-Pacific chief executive Simon Machell said the sale was a good result, showing how strong the Australian market was despite the global financial crisis.

- AAP