BNZ's parent National Australia Bank (NAB) has reached a deal to sell BNZ Life, its New Zealand life insurance business, to Partners Life for NZ$290 million.
In a statement NAB says the deal involves BNZ entering an exclusive 10-year agreement for the referral of its customers wanting life insurance to Partners Life.
On its website BNZ describes Partners Life as a New Zealand life insurance provider with an excellent credit rating and reputation.
"If you have a BNZ Life policy, you will receive more information over the coming months. There will be no changes to your policy up until the date of completion of the sale of BNZ Life to Partners Life. When the sale completes, Partners Life will acquire BNZ Life Insurance Limited and all policies will be insured by Partners Life," BNZ says.
In April 2019 BNZ denied an Australian media report it was considering selling BNZ Life to Partners Life. In a statement Partners Life says it has enjoyed a close business partnership with BNZ for several years, with the sale of BNZ Life to Partners Life "a natural progression" of this strong partnership.
BNZ CEO Angela Mentis says the sale will help BNZ prioritise helping people invest and save, with the BNZ Life sale "providing the best outcome for our insurance customers."
The deal, assuming it's completed, will see Partners Life become the third biggest in NZ by gross premium income with 13% market share. Approval for the deal is required from the Overseas Investment Office and the Reserve Bank. Partners Life counts Blackstone Group as a shareholder. Partners Life has an A- credit rating with a stable outlook from A.M. Best.
(The chart below comes from Deloitte).
Below is NAB's statement.
Agreement to sell BNZ Life Insurance business to Partners Life
NAB today announced it has entered into an agreement to sell BNZ Life, its New Zealand life insurance business, to leading New Zealand life insurance provider Partners Life for NZ$290 million.
The agreement to sell is consistent with NAB’s strategy to focus on its core banking businesses across Australia and New Zealand.
BNZ CEO Angela Mentis said: “Ensuring BNZ customers continue to access insurance remains important to us. We’re confident that this sale will provide the best outcome for our insurance customers and that they will continue to receive a high standard of customer service from a New Zealand insurance provider with a strong local reputation.”
Partners Life Managing Director, Naomi Ballantyne (ONZM) said: “I am absolutely delighted for Partners Life to acquire such a long-standing and respected life insurance business from NAB and we are intent on ensuring that all BNZ Life and Partners Life customers benefit from this transaction.”
Upon completion, the sale is expected to result in an increase in NAB Group’s Common Equity Tier 1 (CET1) ratio of 6 bps based on the NAB Group’s risk weighted assets as at 30 September 2020.
As part of the sale, BNZ will also enter into an exclusive 10-year agreement for the referral of BNZ’s customers with life insurance needs to Partners Life, subject to Partners Life continuing to meet agreed operating standards.
The sale is subject to regulatory and other approvals with completion expected to occur in late 2021.
And here's Partners Life's statement.
PARTNERS LIFE SET TO ACQUIRE BNZ LIFE
Life insurer Partners Life has entered into an agreement to buy the BNZ Life insurance business from BNZ’s Australian parent company NAB. The proposed transaction is subject to approval by the Overseas Investment Office and the Reserve Bank of New Zealand, a process which is expected to take several months.
BNZ and Partners Life have had a close business partnership over several years, with both parties holding each other in high regard and significant respect. The sale of BNZ Life to Partners Life is a natural progression of this strong partnership.
Partners Life has continuously invested in systems, technologies and brand since its inception to build a “template” for how life insurance products should be developed and delivered to New Zealand consumers. The substantial scale of the combined businesses will significantly enhance the efficiency of Partners Life and provide the base from which further innovations can be launched, increasing the value provided to customers.
Partners Life Managing Director Naomi Ballantyne (ONZM) says, “I am absolutely delighted for Partners Life to be in a position to acquire such a long-standing and respected life insurance business from BNZ. We are intent on ensuring that all BNZ Life and Partners Life customers will benefit from this proposed transaction.”
Existing BNZ Life customers will benefit by having their covers upgraded to incorporate the market leading Partners Life claims philosophies, automatic product upgrade provision, customer loyalty benefits and enhancements to their product features and benefits. They will also have the flexibility to add additional covers from the Partners Life comprehensive range of market leading product solutions, where they have a need.
As part of the transaction BNZ and Partners Life have also entered into a long-term referral arrangement. By facilitating a referral to Partners Life for BNZ customers who have an identified risk protection need, BNZ can take comfort that their customer’s life insurance specific needs are being expertly provided for by Partners Life.
BNZ CEO Angela Mentis says, “The sale of our life insurance business will further enable BNZ to prioritise helping people invest and save for their future. We’re confident that this sale provides the best outcome for our insurance customers. They will continue to receive a high standard of customer service from a New Zealand insurance provider with a strong local reputation.”
Partners Life has consistently demonstrated its commitment to the New Zealand market and the wellbeing of families since it was founded in 2011. It has established a number of programmes to support customers and communities and most recently, during the COVID lockdowns, the company made the most generous offer in the industry for premium holidays and policy suspensions, ensuring that customers who had suffered a significant loss of income and were temporarily unable to pay their premiums could keep their insurance while they found new work.