Competition heats up for major bank’s insurance unit

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Another major bank is getting ready to offload its insurance business as competition to buy it heats up.

Four parties have reportedly been shortlisted as likely buyers for Commonwealth Bank’s $1 billion general insurance business, with final bids due in the next month, according to a report by The Australian. IAG and Suncorp are considered favourites, although Japan’s Tokio Marine is thought to still be in the running.

The identity of the fourth shortlisted company is uncertain, although market experts say QBE is the most likely candidate, according to The Australian.

Goldman Sachs is running the sale for CBA.

While Suncorp and IGA are considered frontrunners, there is some risk that they’ll face roadblocks from the Australian Competition & Consumer Commission. IAG is the top player in the Australian general insurance market across all lines of insurance, and Suncorp also has significant market share.

CBA’s general insurance sale is nearing completion as Westpac launches the sales process for its life insurance operations, worth about $1.5 billion. Resolution Life and TAL Insurance are each reportedly seeking to buy the business, which sits within Westpac’s wealth management arm.

Read more: Another major bank prepares multibillion-dollar insurance unit sale

Resolution purchased AMP’s life insurance business last year for $3 billion.

The companies have divergent strategies for the Westpac life insurance business, according to The Australian. TAL has growth aspirations, while Resolution would run the assets off over time.

Goldman Sachs is reportedly working on the sale of Westpac’s wealth assets.

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