AIA Group to sell some Australian assets to Resolution Life

[HONG KONG] Asian insurance firm AIA Group has agreed to sell its Australian superannuation and investments (S&I) business to Resolution Life, the companies said Thursday (Feb 24).

The sale transfers more than A$8 billion (S$7.8 billion) in funds under management consisting of policies that date back to the Hong Kong-based insurer's acquisition of Commonwealth Bank of Australia's life insurance business in 2017.

AIA was considering selling some legacy life insurance assets to Resolution for a few hundred million dollars, Bloomberg News reported in January.

The transaction will streamline AIA's portfolio while adding 162,000 new customers to Resolution Life's existing 1.1 million in the region, the companies said. It will allow closely-held Resolution, which specialises in acquiring and managing active insurance policies, to capitalise on recent investments in its digital platform in Australia, after already spending over A$1 billion on its business in the region, the Resolution statement said.

"Following a review of the overall portfolio in Australia, AIA concluded that the S&I business is non-core to AIA's strategy to be the leading life, health and wellness provider in Australia and does not meet AIA's financial criteria," the AIA statement said. It did not include a transaction value.

AIA originally bought Commonwealth Bank's life insurance business in a A$3.8 billion deal, marking the most ambitious foray beyond the company's core markets in Asia at the time.

Since 2003, Resolution Life has invested more than US$17 billion of equity in the purchase, reinsurance, consolidation and management of life insurance firms, according to its website. It has operations in Bermuda, the UK, the US, Australia and New Zealand.

Resolution Life was advised by Deutsche Bank, the company said. Under the terms of the agreement, AIA Australia will continue to provide transitional services for as long as 18 months after the deal's close, Resolution said. BLOOMBERG