Brisbane-based insurance company Suncorp has reportedly announced to return $600 million to its shareholders after concluding the sale of its life insurance business in Australia. As per trusted sources, the insurance company will be selling the business to TAL Dai-ichi Life Australia Pty Ltd.
Reportedly, the company has informed its shareholders that it will be selling its insurance business to TAL Dai-ichi for approximately $725 million. The company presently insures about 4 million Australians, cite sources.
For the uninitiated, TAL Dai-ichi Life Australia is owned by Japan-based insurance company Dai-ichi Life Holdings Inc. Reportedly, the deal is the latest in Dai-ichi’s overseas expansion ventures as the insurance company looks for new growth avenues given the shrinking size of the Japanese market.
Sources familiar with the development claim that after removal of transaction and separation costs along with hybrid and provision capital, the company will be returning the remaining $600 million to shareholders following the conclusion of the transaction by the end of 2018.
According to the Australian Broker, the sale also comprises a distribution agreement of 20 years with TAL Dai-ichi. As a part of the agreement, TAL Dai-ichi will be offered Suncorp’s market-leading insurance solutions via the Australian distribution channels including contact centers, digital channels, and store network.
Reportedly, Suncorp would continue to garner income on the distribution of the life insurance services in Australia. Moreover, the life insurance business of Suncorp in New Zealand would remain unaffected.
Suncorp Group is a top 20 ASX-listed business with a market capitalization of around $20.05 billion and serves around 9 million customers in New Zealand and Australia, cite sources.
The share prices of Suncorp reportedly dropped in the morning trade following the sale announcement. The deal is anticipated to be concluded by the end of this year after fulfilling certain regulatory approvals and conditions in Japan and Australia.