Suncorp to sell life business for $725 million
Suncorp will sell its Australian life insurance business to TAL Dai-ichi Life for about $725 million after announcing early last year that it was reviewing the future of the business. The company says it expects to return about $600 million to shareholders, with the exact amount and the structure of the capital return to be announced before completion of the sales agreement. Suncorp expects to book a non-cash write-down to goodwill and net assets of around $880 million in the current financial year. The deal, which would include a 20-year distribution agreement, is expected to be “marginally accretive” to cash return on equity. Suncorp, which made the announcement with the release of its annual results, has signed a non-binding heads of agreement with Dai-ichi and expects to complete the deal by December 31. The group reported its net profit fell 1.5% to $1.059 billion for the year ended June 30. Australian general insurance profit declined 1.2% to $681 million, while gross written premium (GWP) increased 0.3% to $8.14 billion. Life insurance net profit after tax rose 70.6% to $58 million. New Zealand general insurance earnings rose to $99 million from $45 million a year earlier, with GWP increasing 5.7% to $1.42 billion. CEO Michael Cameron said Suncorp had achieved a stronger second half, with profit rising 34% compared with the first six months. More details in our regular bulletin on Monday.