Commonwealth Bank of Australia (CBA) has agreed to sell its Australian general insurance business – CommInsure General Insurance – to the Hollard Group. As part of the transaction, CBA has established an exclusive 15-year strategic alliance with Hollard for the distribution of home and motor vehicle insurance products to CBA’s retail customers in Australia.
According to CBA, the transaction consideration includes $625 million upfront, together with deferred payments that are payable on achieving certain business milestones, and additional investment from Hollard throughout the 15-year alliance to “drive innovation” and “enhance the customer experience”. CBA will continue to earn income on the distribution of home and motor insurance products.
CBA said it expects to receive a pre-completion dividend with the amount subject to the timing of completion, business performance and regulatory approvals. Completion of the transaction remains subject to APRA approval and is expected to occur in mid-2022.
Matt Comyn, CEO of CBA, said the transaction is consistent with the bank’s strategy to deliver differentiated customer propositions and the best integrated digital experiences. “CBA and Hollard will co-invest in innovative, market-leading products and services that anticipate and meet the changing needs of our customers,” he said.
Angus Sullivan, Group Executive Retail Banking Services at CBA, believes customers will benefit from the transaction. “This long-term strategic alliance will bring together CBA’s number one mobile banking app and Australia’s largest branch network with Hollard’s innovative insurance products and enhanced claims technology, to deliver excellent experiences for our customers,” he said.
According to Managing Director for Hollard Holdings Australia, Richard Enthoven, the acquisition will drive digital innovation.
“We are incredibly excited by today’s announcement,” he said. “The synergies between CBA and Hollard extend well beyond strategy and market segmentation. We have a shared vision for the future of home insurance, the potential for better customer outcomes, and an exciting role for digital innovation along our entire value chain.”
CBA says CommInsure General Insurance provides motor vehicle and home and contents insurance products to more than 800,000 CBA customers.