Suncorp confirms sale of life insurance arm delivering bulk shareholder returns

Suncorp confirms sale of life insurance arm delivering bulk shareholder returns

Suncorp's (ASX: SUN) $725 million sale of its life insurance arm to Japanese insurance group Dai-ichi Life is set to deliver windfall returns for shareholders.

The sale, announced in early August alongside its FY18 results, is set to deliver approximately $600 million to shareholders according to Suncorp.

The sale to Dai-ichi's Australian subsidiary TAL Dai-ichi Life Australia (TAL) includes a 20-year distribution agreement with TAL to offer life insurance solutions through Suncorp's Australian distribution channels.

Under the terms of the deal, Suncorp will continue to earn income on the distribution of life insurance.

Completion of the transaction is expected to occur by 31 December 2018, subject to the satisfaction of certain conditions and regulatory approvals in Australia and Japan.

In August, the company announced its full year results, which saw the company's full year profits drop 1.5 per cent to $1.06 billion.

Suncorp's cash earnings also took a dive, down 4.1 per cent from $1.14 billion in FY17 to $1.09 billion this year.

The company was one of the many financial institutions that took a grilling at the royal commission into the financial services industry, though it is not clear if the business was materially hit by the results of the commission.

Ultimately, the second half of the year was buoyed by how tough the business had it in the first half. Suncorp's first half results took a pummelling from the unanticipated amount of damage from a variety of natural disasters, including the Melbourne hailstorm event, which saw Suncorp's first half profit drop 15.8 per cent to $452 million.

The future seems bright for the insurance giant, which will soon settle into a new $800 million tower in Brisbane as part of a lease agreement which has been dubbed Brisbane's largest in a decade.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Looking for a credit or charge card that’s built for your business? Try American Express
Partner Content
A good credit card should work for you, not against you, and let you and your business ...
American Express
Advertisement

Related Stories

IDP Education expands global footprint with $83m Intake Education acquisition

IDP Education expands global footprint with $83m Intake Education acquisition

English language testing giant IDP Education (ASX: IEL) has expande...

Proptech CIM set to bolster global footprint after raising $10m in Series A

Proptech CIM set to bolster global footprint after raising $10m in Series A

A Sydney-based software company using machine algorithms to mo...

Digital freight forwarder Ofload buys CIA Logistics after notching 500pc revenue growth

Digital freight forwarder Ofload buys CIA Logistics after notching 500pc revenue growth

After 35 years in business, Port Melbourne-based freight specialist...

Court finds Mayfair 101 director was denied procedural fairness, orders retrial

Court finds Mayfair 101 director was denied procedural fairness, orders retrial

An order restraining Mayfair 101 director James Mawhinney from deal...