Resolution Life intends to take a different approach with Asteron Life, saying it wants the business to keep operating as it is, taking on new customers.
Resolution Life Australasia chief executive Tim Tez recognised the company predominantly grows by acquiring portfolios of existing life insurance policies. But it remains open to growing new business in “select strategic markets”.
“Asteron Life presents a compelling opportunity to continue to grow through new individual and group customers while continuing to support existing customers,” Tez said.
“As a trusted life insurer, Asteron Life will continue to operate as a standalone New Zealand-licensed life insurance company, under its existing brand in New Zealand and support advisers and their customers using the same dedicated team and management.”
Suncorp reiterated the proposed sale wouldn’t change Asteron Life’s business operations.
Suncorp New Zealand chief executive Jimmy Higgins said the transaction would enable Suncorp’s New Zealand team to focus exclusively on general insurance, including home, vehicle and contents insurance (Suncorp is one of New Zealand’s two major general insurance providers).
Suncorp Group chief executive Steve Johnston recognised the company had simplified its portfolio in recent years.
“We remain committed to the New Zealand general insurance market as part of our refocused group,” Johnston said.
After a battle with Australia’s competition watchdog, Suncorp Group was last month given clearance to sell its banking arm to ANZ.
Big financial services companies have for some years been breaking themselves up, as regulators have required them to hold more capital.
The major banks, for example, have sold their insurance and wealth management businesses.
The RBNZ, Commerce Commission and Overseas Investment Office need to approve the proposed sale of Asteron Life for the transaction to proceed.
Getting these approvals is expected to take nine months.
The Commerce Commission will need to consider whether there will be enough competition in the life insurance sector, following Resolution Life buying a second big book of policies.
The RBNZ will need to weigh up whether Asteron Life will continue meeting the conditions required of companies given insurance licences in New Zealand.
When Resolution Life bought AMP Life, the RBNZ required Resolution Life to hold capital and assets in a New Zealand trust to “provide long-term security for policyholder benefits or investments”.
It made Resolution Life set up a new locally incorporated insurer to act as a trustee to the trust and said the company’s board had to have a majority of New Zealand-resident, independent directors.
Jenée Tibshraeny is the Herald’s Wellington business editor, based in the parliamentary press gallery. She specialises in Government and Reserve Bank policymaking, economics and banking.
