Westpac has agreed to divest Westpac Life Insurance Services, its Australian life insurance business, to TAL Dai-ichi Life Australia, a subsidiary of Japan-based Dai-ichi Life Holdings, for AUD 900 million ($660 million).

After completion of the deal has also entered into an exclusive 20-year agreement for providing life insurance products to its Australian customers.

The deal will mark the exit of Westpac from developing life insurance products while releasing significant capital back to the Australian bank.

Westpac said that the total accounting loss on sale is nearly AUD 1.3 billion post-tax.

Jason Yetton — Westpac Group Chief Executive Specialist Businesses and Group Strategy, said: “This transaction is another step in simplifying the bank while continuing to help customers with their life insurance needs by partnering with TAL.

“Life insurance is an important product for many Australians and this sale provides certainty for customers and new opportunities for our people with TAL.

“TAL already offers insurance products to more than 4.5 million Australians and is well placed to help Westpac’s customers protect the people they love.”

Westpac said that it will retain responsibility for some pre-completion matters and offer protection to TAL Dai-ichi Life Australia via a mix of provisions, indemnities, and warranties.

The deal, which is subject to various regulatory approvals, is likely to close in the latter half of 2022.

Last month, Westpac signed a deal worth NZD 400 million to sell its New Zealand life insurance business – Westpac New Zealand Limited to Fidelity Life Assurance Company.

  Australia, Dai-ichi Life, Insurance acquisition news, Insurance industry news, Jason Yetton, life insurance, TAL Dai-ichi Life Australia, Westpac, Westpac Group