The Commonwealth Bank has sold its beleaguered life insurance business CommInsure to AIA and announced a series of other sweeping changes, including a strategic review of Colonial First State Global Asset Management (CFSGAM).
In a series of announcements on the ASX, the Big Four bank said AIA has picked up 100 per cent of CommInsure Life and (NZ business) Sovereign for $3.8 billion. CBA will retain the CommInsure brand and the right to distribute life and health insurance products to its customers in a 20-year partnership. CBA will retain its general insurance offering.
CBA also said it is reviewing the future of CFSGAM and signalled interest in a possible float.
Wealth management executive Annabel Spring will depart in December.
In a briefing to investors, the outgoing Spring said the strategic review of CFSGAM would consider what long-term value the asset management arm has for CBA shareholders.
The review would consider the growth, scale, diversification and investment performance of CFSGAM, along with its future capacity, she added, noting it had become “increasingly distinct from the bank”.
The bank declined to tell investors the equity value of CFSGAM.
Commenting on the CommInsure transaction, CBA chief executive Ian Narev said: “We have said for some time that while distributing life insurance is a fundamental part of [our] strategy, we were open to different models for doing so. The combination of AIA’s leading insurance capability and scale and Commonwealth Bank’s broad distribution, and our complementary values and commitment to customer focus and innovation, mean that a partnership between us will create an even better experience for our customers, in a more efficient way for our shareholders.
Michael Venter, CBA’s current chief financial officer of international financial services, has been appointed chief operating officer of wealth management, effective immediately. He will be in charge of the organisational changes to follow the sale and leadership restructure.
