The biggest Australian lender Commonwealth Bank of Australia (CBA) has announced that it will undertake a strategic review of its general insurance business, including a potential sale.
CommInsure General Insurance is a high quality provider of home and contents and motor vehicle insurance products to meet the protection needs of CBA customers, says the bank in a statement. As part of the strategic review of CommInsure General Insurance, CBA intends to explore the opportunity to further enhance its product and service offering to customers through a potential sale and partnership with a specialist insurance provider.
The review will be in addition to demerging its demerge its wealth management and mortgage broking businesses. These initiatives will result in the creation of a leading independent wealth management business and enable CBA to enhance its focus on its core banking businesses in Australia and New Zealand and create a simpler, better bank.
The demerged business, CFS Group, will include CBA’s Colonial First State, Colonial First State Global Asset Management (CFSGAM), Count Financial, Financial Wisdom and Aussie Home Loans businesses.
CommInsure General Insurance could be worth about A$1 billion ($740 million), with analysts tipping the big domestic insurers could be buyers, reports The Australian Financial Review.
CBA sold its life insurance division to pan-Asian insurer AIA Group last September for A$3.8 billion, but the bank made it clear at the time it was keeping its general insurance operations.
CBA is the eighth largest player in the general insurance market on PwC Australia's numbers, trailing the likes of QBE Insurance, Insurance Australia Group, Suncorp and Allianz Australia.
The demerger does not impact the 20-year strategic distribution partnership with AIA in relation to bank customers. The partnership will also extend to the CFS Group. CFS Group's customers will be able to benefit from AIA’s innovation in life insurance including a focus on digital engagement, together with the benefits and synergies of global scale and specialisation.