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Sale of Sovereign to AIA and OnePath to Cigna

Sovereign sale to AIA
In September 2017, Sovereign was sold to the large asian insurer AIA for $4.15 billion. Sovereign protects more than 646,000 New Zealanders.

The important thing is that the terms and conditions of the policies are contractually governed by the policy documents and the sale does not affect any insurance cover that policy holders have in place.

AIA has signed a 20-year deal under which ASB and Commonwealth Bank will continue to sell insurance from the two businesses.

Sovereign was the first company to challenge the traditional mutual insurers (AMP, National Mutual, Colonial Mutual, Prudential and Tower - ex Government Life), by breaking the mould and distributing through independent advisers in the late 1980's. Established by Ian Hendry and Chris Coon, and supported by Naomi Ballantyne, Sovereign became a leader in the provision of innovative insurance solutions.  Over time, it purchased other insurers and eventually became the 'old guard'.  It was sold to Commonwealth Bank of Australia in 1998.

Many of the Sovereign employees have moved to AIA, and the Sovereign CEO at the time of sale is now the CEO of the combined business.

This deal was finalised on July 2018.

For more information - here are some articles.

Insurance giant AIA outlines NZ expansion plans after acquiring Sovereign

OnePath Life sale to Cigna.
On May 30th 2018, ANZ agreed to sell the remaining parts of OnePath Life to Cigna in a sale worth $700 million. This transaction impacts on 186,000 or so customers.  The sale includes a 20 year strategic alliance for Cigna to provide insurance for ANZ's direct customers.

The important thing is that the terms and conditions of the policies are contractually governed by the policy documents and the sale does not affect any insurance cover that policy holders have in place.

OnePath Life policyholders in New Zealand would continue to receive the cover they hold under the terms of their policies.

The acquisition has been approved by the boards of both companies and is still subject to final regulatory approval. It is expected to take between six to nine months to complete the transaction

OnePath Life was initially ClubLife - which is a company that was created by Naomi Ballantyne (who was previously instrumental in developing Sovereign to its market dominance before it was sold to Commonwealth Bank, and is now heading up Partners Life, which she created in 2011).

ClubLife was sold to Hellaby Holdings, then to ING.  When ING was sold to ANZ, the brand changed to OnePath Life.

The sale to Cigna is interesting, as Cigna in New Zealand specialises in mass market offers and underwriting insurance.  You may have seen their name on funeral cover that is advertised on TV, or in the small print on your credit card travel insurance.  Cigna have not had a presence with financial advisers for around 15+ years, and it will be interesting to see how that side of the business develops, Cigna also provides insurance to BNZ customers.

OnePath Life sold its Health/Medical insurance business to NIB in 2017 - a transaction which has been completed.

For more information, here are few articles.

 



 

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