ANZ Offload OnePath To Cigna

ANZ has agreed to sell its OnePath Life insurance operation for $700 million to rival insurer Cigna. The sale would need to be approved by regulators, and did not include its KiwiSaver operation.

The deal would see Cigna become the insurer behind the life, trauma and critical illness policies of 186,000 or so customers.

Policyholders unhappy with the sale can switch to rival insurers, though as people aged they sometimes develop medical conditions that can make it hard to switch insurer while maintaining the same level of cover.

ANZ chief executive David Hisco said the sale included a 20-year strategic alliance for Cigna to provide insurance for ANZ's customers and was consistent with ANZ's strategy to simplify its business.

"Under this agreement, ANZ will continue to provide life insurance to our customers but these insurance policies will now be manufactured and managed by a world-class insurance provider in Cigna," he said.

"This is consistent with how we provide motor vehicle, home, commercial and travel insurance using a range of specialist insurance partners."

OnePath Life policyholders in New Zealand would continue to receive the cover they hold under the terms of their policies. OnePath staff would be offered roles with Cigna, or other roles in the bank.​

Cigna New Zealand chief executive Gail Costa said: "This acquisition will enable us to provide broader solutions and be more agile and responsive to a larger customer base."

The sale remains subject to regulatory approval and is expected to complete later this year, or early next.

Cigna already provided insurance to BNZ customers, said Costa. Not all of the policies that would transfer to Cigna were bought by ANZ's bank customers. Onepath also sold policies through insurance advisers.

Bank insurers have been extremely profitable operations, but Onepath had declined in profitability.

Its financial statements for the year to the end of September 2017 showed a profit after tax of $32.3m. In the previous financial year its profit after tax was $103m, though that includes proceeds from the sale of its health insurance business to nib.

OnePath Life was founded in 2001 as Club Life by Naomi Ballantyne, who went on to found Partners Life, which now competes with Onepath.

ANZ bought it in 2003 in a joint venture with Dutch company ING.

The bank bought out ING in 2009, and rebranded the business to Onepath Life in 2010.