Will Allianz Buy CBA’s General Insurance Division?

Will Allianz Buy CBA’s General Insurance Division?

Insurance group Allianz is reportedly looking to secure the Commonwealth Bank of Australia’s (CBA) insurance division.

Will Allianz Buy CBA’s General Insurance Division? - Oliver Baete
Oliver Baete.

According to a report appearing in the DataRoom column of ‘The Australian’, the Munich-headquartered global insurer has asked Barrenjoey Capital Partners to provide advice on its CBA bid. The rumoured action follows Allianz’s move to increase its share in the Australian consumer insurance market by purchasing Westpac Banking Corporation’s general insurance business late last year for $725 million, with the transaction expected to complete in mid-2021.

Announcing the Westpac deal in December 2020, Allianz hinted that further acquisitions were planned, saying the agreement represents an important step in Allianz growing its consumer insurance portfolio in Australia. Oliver Baete, CEO of Allianz SE, added the company was “delighted to further strengthen our position in the Australian retail market,” while Allianz Australia Managing Director, Richard Feledy, said “Allianz is a proven bancassurance (the selling of insurance products and services by banking institutions) partner, both globally and locally, and we are committed to further investing in this channel.”

Will Allianz Buy CBA’s General Insurance Division? - Richard Feledy
Richard Feledy.

Quoting IBISWorld data, The Australian said Allianz is ranked third in terms of general insurance market share in Australia, behind IAG and Suncorp, respectively. According to The Australian, both IAG and Suncorp are also interested in acquiring CBA’s general insurance business, along with international insurer Tokio Marine. QBE is also said to be interested, though its bid is considered less certain. Final bids are believed to fall due this month.