Commonwealth Bank of Australia (CBA) is selling its life insurance business, CommonInsure Life and New Zealand equivalent Sovereign to AIA for A$3.8bn (USD $3.03bn)
Furthermore, the bank is also looking at disposing its global asset management business.
The terms of the sale include a 20-year deal for CBA to distribute AIA life insurance products in Australia and New Zealand. However, it does not encompass general insurance.
As part of the deal, CBA will continue to use the CommInsure brand, earning income on the distribution of life and health insurance.
According to CBA chief executive Ian Narev, the lender remains devoted to offering high quality products. He said the bank will be willing to adopt other business models despite having distributed life insurance for some time.
Customers are expected to benefit from AIA’s leading insurance capability and scale as well as CBA’s broad distribution network.