Australia’s largest bank has announced it is selling its general insurance business, CommInsure General Insurance, to global insurance giant Hollard for a $625 million deal.
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The agreement will create a “15-year strategic alliance” with Hollard to sell home and motor insurance to CBA’s customers, the bank said in a press release. statement to the ASX Monday morning.
While Hollard will sell the insurance products, the major bank will continue to make a profit, with CBA taking $90 million in profit from the sale.
Commonwealth Bank (ASX:KBAThe stock price, which recently hit an all-time high after the $100 per share milestone, surfaced after the news, falling nearly 5 percent around noon.
The deal has yet to be approved by regulatory authorities and is expected to close in mid-2022.
“The transaction is consistent with CBA’s strategy to deliver differentiated customer propositions and the best integrated digital experiences,” said CBA chief Matt Comyn.
“CBA and Hollard will jointly invest in innovative, market-leading products and services that anticipate and meet the evolving needs of our customers.”
CommInsure General Insurance currently provides home and motor insurance coverage to 800,000 Australians.
Hollard Holdings Australia director Richard Enthoven said the company felt a “real connection to CBA”.
“We are delighted to welcome the folks at CommInsure to the Hollard family and see this opportunity as a great privilege to work with them and CBA over the next 15 years to reinvent personal insurance products and services for all Australians. find,” he said.
“This partnership enables Hollard to invest alongside CBA to innovate and deliver market-leading experiences to CBA customers.”
Yahoo Finance has contacted CBA for further comment.
About Hollard Insurance
Hollard was founded in 1999 in South Africa to provide self-insurance programs for large corporate clients and banks.
The company now has businesses around the world, including Australia, New Zealand, UK, China and more.
In addition to home, contents and car insurance, Hollard also offers bicycle, pet and business insurance.
Hollard has more than 1.2 customers and 800 employees in Australia.
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