Wednesday 2nd December 2020
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Westpac Group today announced it will sell Westpac General Insurance Limited and Westpac General Insurance Services Limited to Allianz and enter into an exclusive 20-year agreement for the distribution of general insurance products to Westpac’s customers.
The sale price of $725m represents a multiple of 1.3x FY20 gross written premium and is estimated to result in a small post-tax gain on sale in FY 2021. The sale of our General Insurance business adds around 12 bps to Westpac’s common equity Tier 1 capital ratio.
The transaction also includes contingent payments subject to integration milestones and business performance over the next five years, as well as ongoing payments in accordance with the distribution agreement.
The new distribution arrangement expands the Group’s existing partnership with Allianz, which has seen Westpac distribute a range of Allianz’s products to customers including Auto, Travel, Boat and Business insurance since 2015.
Westpac will retain responsibility for certain pre-completion matters and provide protection to Allianz via a combination of provisions, warranties and indemnities. Completion of the transaction is subject to various regulatory approvals and is expected to occur in Second Half 2021.
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