Westpac sells insurance arm Japan’s Dai-ichi Life for A$900m

This marks the Australian firm’s exit from the life insurance sector.

Australian firm Westpac Banking Corp. has sold its insurance arm, Westpac Life Insurance Services Limited, to Japanese insurer Dai-ichi Life Holdings for A$900m ($662m).

The acquisition was made through the Australian subsidiary of Dai-ichi Life, TAL Dai-ichi Life Australia Pty Limited.

According to Westpac, the transaction will see the company’s exit in manufacturing life insurance products and release significant capital back to the bank. The total accounting loss on sale is approximately A$1.3b post-tax, whilst the transaction will add approximately 12 base points to Westpac’s Level 2 common equity Tier 1 capital ratio.

The company expects an after-tax accounting loss of A$1.3b ($960m) on the sale and about A$300m ($220.65m) post-tax loss to be realised in its 2021 fiscal results.

In a statement, Westpac Group's Chief Executive Specialist Businesses and Group Strategy, Jason Yetton, said this transaction is another step in simplifying the bank whilst continuing to help customers with their life insurance needs by partnering with TAL.

“Life insurance is an important product for many Australians and this sale provides certainty for customers and new opportunities for our people with TAL. TAL already offers insurance products to more than 4.5 million Australians and is well placed to help Westpac’s customers protect the people they love,” Yetton added.

The transaction is expected to be completed in the second half of 2022.