TAL acquires Suncorp Life

Following a strategic review, Suncorp will sell its life insurance business to TAL.

TAL Dai-ichi Life and Suncorp have entered into a non-binding Heads of Agreement that will see TAL acquire the business for $725 million.

The agreement includes a 20-year strategic alliance, with TAL to offer its life insurance solutions via Suncorp's distribution channels and Suncorp will continue to earn income on that distribution.

The decision follows a strategic review which considered a number of options including additional reinsurance, partnerships and divestment.

Suncorp chief executive and managing director Michael Cameron said the sale was the superior option, adding that it will simplify Suncorp's business model.

"The long-term strategic alliance between TAL and Suncorp will allow us to offer excellent value to Suncorp's Australian customers," he said.

TAL Group chief executive and managing director Brett Clark said: "As Australia's leading life insurance specialist, we are delighted to be partnering with Suncorp Group."

"This transaction will significantly expand TAL's market leading presence in Australia and will provide exciting opportunities for us with additional trusted and recognised brands, and a broader group of financial advisers."

He added the acquisition will enhance TAL's scale and capability across the retail, group and direct segments, while opening up important new distribution channels.

The transaction is expected to be completed by the end of the calendar year, with Suncorp anticipating about $600 million of the sale price will be returned to shareholders.

Completion of the transaction is expected to result in an after tax non-cash loss on sale of about $880 million in FY19.

Read more: Brett ClarkMichael CameronSuncorp GroupTAL Dai-ichi LifeTAL Group
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