Reserve Bank approves IAG's NZ buy

Photo / NZPA

New Zealand's Reserve Bank has approved Insurance Australia Group's application to buy the underwriting businesses of Lumley Insurance, after the Commerce Commission gave its consent to the deal last month.

The bank said yesterday it had completed its assessment of the proposed change of control of Lumley General Insurance (NZ) Ltd to IAG (NZ) Holdings.

It said it was satisfied that Lumley "would continue to meet the licensing criteria ... should the proposed transaction occur".

The New Zealand leg of the transaction is part of a wider A$1.85 billion ($2 billion) deal for IAG to buy assets in New Zealand and in Australia.

Lumley's underwriting business is being sold by ASX-listed giant Wesfarmers.

Lumley has its headquarters in the Lumley Tower on Shortland St, and IAG is on Fanshawe St near the Viaduct Basin waterfront area.

In Australia, approvals are pending from the Australian Prudential Regulation Authority and the Federal Treasurer.

IAG hopes the deal will be completed by the end of this month.

IAG's New Zealand chief executive, Jacki Johnson, welcomed the Reserve Bank approval and said attention would now move more fully to considering how customers and partners of Lumley and NZI would be best served through the transition and period of integration that would follow the final approvals being received in Australia.