Suncorp New Zealand says an Australian report that Suncorp Group is preparing Asteron Life for sale comes from a "gossip column" and it's investing in the NZ life insurer as part of a five-year strategy.
The Australian Financial Review's Street Talk column says; "Suncorp Group is prepping its New Zealand life insurance business for a sale, making it clear to its investment banking mates that the business should be at the front of their pitchbooks." It notes that Asteron Life has 11.7% market share, which is up 2.2 percentage points over the past 12 months in competition with the likes of AIA, Partners Life, Fidelity Life and Cigna.
Street Talk suggests Asteron Life could fetch A$500 million to A$600 million, should it be sold, leaving Suncorp Group as "a pure-play general insurer" in both Australia and NZ.
“This is speculation that has come from an Australian gossip column. This often happens as part of our results reporting cycle, when we are in the news," A Suncorp NZ spokeswoman told interest.co.nz.
"Our life business is a significant contributor to our insurance business, a part of the business we're investing into through our five-year strategy. Asteron Life’s half-year results released yesterday are testament to this investment in customer retention and growth. Asteron Life’s profit was $16 million, $10 million above the previous comparable period.”
Suncorp's NZ general insurance operations include Vero and AA Insurance.
Westpac, BNZ, ANZ and ASB's parent Commonwealth Bank of Australia have all sold their NZ life insurance businesses in recent years, which credit rating agency S&P has suggested deliver a decent return on equity to shareholders. And last year Japan's Dai-ichi Life Holdings bought Partners Life for $980 million.
Street Talk went on to say Asteron Life is viewed as a non-core business by analysts and investors, with sources suggesting Suncorp "was keen to engage with suitors capable of rustling up a compelling offer." Nonetheless the column said Suncorp hadn't appointed a sales adviser, and was "also unlikely to hang a for-sale sign and run a traditional auction, thanks to a limited pool of suitors."
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