New player vying for Commbank general insurance unit

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    A new player is reportedly entering the competition to buy Commonwealth Bank’s $1 billion general insurance division.

    German insurance giant Allianz, which recently inked a deal to buy Westpac’s general insurance business for $700 million, is now vying to acquire CBA’s general insurance operation, according to a report by The Australian. Final bids for the CBA insurance business are due this month.

    There are good reasons for CBA to make a deal with Allianz – not least of which is the insurance giant’s ability to provide white-label insurance products to the bank’s home loan customers, according to The Australian.

    Should Allianz succeed in snapping up CBA’s insurance operations, it will significantly increase its scale in Australia. In the Australian general insurance market, IAG leads with a 21.7% market share. Suncorp has 12.4%, and Allianz has 7.8%, according to The Australian.

    Read more: Insurer hires investment bank in $1bn bid for Commbank general insurance unit

    CBA’s general insurance business is expected to sell for about $1 billion. IAG and Suncorp are also bidding for the business. While IAG was considered an early strong contender, Suncorp has also been aggressively pursuing the acquisition. However, both IAG and Suncorp are likely to face challenges getting clearance from the Australian Competition & Consumer Commission.

    QBE is also reportedly interested in the business, but the company is currently being run by interim head Richard Pryce. The board may not be prepared to make an acquisition until incoming CEO Andrew Horton takes the reins in September, The Australian reported.

    Ryan SmithRyan Smith is currently an executive editor at Key Media, where he started as a journalist in 2013. He has since he worked his way up to managing editor and is now an executive editor. He edits content for several B2B publications across the U.S., Canada, Australia, and New Zealand. He also writes feature content for trade publications for the insurance and mortgage industries.
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