Swiss insurance giant Zurich has entered into an agreement with Australian investment bank Macquarie Group to buy its life insurance business, Macquarie Life.
Announcing the deal on Friday, Zurich said it expects the transaction to be completed in the second half of 2016, subject to regulatory approval.
The announcement came the same day that Zurich released its 2015 results, in which it reported a 53% fall in profits.
The deal will see Macquarie Life’s staff and customers transferred to Zurich, the latter said. Macquarie Life insurance products will continue to be sold under the Macquarie brand in the lead up to the sale.
Colin Morgan, chief executive of Zurich’s Asia Pacific Global Life business, said: “Our Australian life business has experienced strong growth – over the last 5 years in particular – and is a major contributor to the strength and profitability of Zurich’s Asia Pacific regional Global Life business.
“Our growth ambitions in the Asia Pacific region are underpinned by a strategy which drives value from our balanced portfolio of growth and mature markets and leverages our distinctive capabilities across the region.”
He said the deal “accelerates” Zurich’s growth ambitions in the region.
Zurich reported net income attributable to shareholders of US$1.842bn, down from $3.949bn in 2014, a 53% fall. Its business operating profits also slumped to $2.916bn, down from $4.638bn in 2014.
Chairman John de Swaan called it a “disappointed” result, and blamed “challenges” in the General Insurance business, which saw business operating profits fall by 71%.
The dramatic explosions in the Chinese city of Tianjin in August last year were cited as a major contributor to the poor result, costing the insurer $275m in claims. Zurich also cited natural catastrophe claims as major drain, particularly those relating to flooding in the UK and Ireland.