AIA buys Commonwealth Bank's life insurance arm for $3 bln
Hong Kong-listed AIA Group purchased the life insurance arm of Australia's largest bank, Commonwealth Bank (CBA), for 3.8 billion Australian dollars (3 billion US dollars) in a deal announced on Thursday.
Troubled lender the CBA is under a cloud as it faces legal action over alleged breaches of money laundering and terror financing laws, and has also been beset by a scandal over poor financial planning advice.
The CBA said the sale of CommInsure Life would make AIA the market leader in both countries.
AIA, the largest listed insurance group in Asia, operates in 18 markets across the Asia-Pacific region.
The deal included a 20-year right for CBA to distribute AIA's products in Australia and New Zealand, with customers retaining their current benefits under existing policies.
Chief executive Ian Narev said the sale to AIA, which already has insurance businesses in Australia and New Zealand, would see the lender book an after-tax loss of 300 million Australian dollars (239 million US dollars).
CommInsure was hit by controversy in 2016 when its managers were accused of pressuring doctors to alter medical opinions so it could deny claims.
ASIC in March cleared it of the allegations but identified a number of areas where improvements could be made to its claims-handling processes.
In a separate announcement, the bank, the country's largest firm by market capitalization, said it could also spin off its global asset management business.
Colonial First State Global Asset Management (CFSGAM), which is known outside the country as First State Investments, manages around 219 billion Australian dollars (174 billion US dollars).