Talks begin to divest Sovereign business

by Krizzel Canlas10 Aug 2017
New Zealand’s largest life insurance business, Sovereign, could be sold, according to owner Commonwealth Bank of Australia.

In a statement, CBA said that it is in discussion with potential buyers in relation to interest in its life insurance business.

“Today we have announced we are in discussion with third parties in relation to their potential interest in our life insurance businesses in Australia and New Zealand,” CBA said.

However, according to CBA, the outcome of those discussions is uncertain. “While the discussions may lead to the divestment of those businesses, we will also consider a full range of alternatives, including retaining the businesses, reinsurance arrangements or other strategic options,” CBA said.

CBA has briefed its teams on the announcement as it is “business as usual”, Sovereign chief executive Nick Stanhope told the NZ Herald.

“We have also shared with them that CBA has reaffirmed that the provision of insurance products to its customers remains core to its vision,” Stanhope said.

Australia’s biggest bank said that insurance arm, CommInsure, is also a prospect in the ongoing talks.

“CommInsure and Sovereign are strong businesses with scale, expertise, competitive products and access to attractive distribution channels,” CBA said.

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