Zurich Australia Limited has announced that it has agreed to acquire the Macquarie Life insurance business from the Macquarie Group. The transaction, which is subject to regulatory and court approvals, is expected to be completed in the second half of 2016.

Under the deal the Australian-based staff of Macquarie Life will transfer to Zurich and Macquarie Life policyholders will become customers of Zurich who will honour all obligations under new and existing policies. Macquarie Life will continue to offer its products to new customers under the Macquarie brand until the completion of the sale.

Head of Macquarie’s banking and financial services group statement

The head of Macquarie’s banking and financial services group said: “Macquarie Life is a well performing business and has been recognized by the industry for its innovation and commitment to customer service. The sale of the business reflects the need for significant scale in the capital intensive life insurance industry in order to drive appropriate returns. Zurich’s expertise, global reach and customer focus mean it is ideally positioned to continue providing high-quality insurance products and services to Macquarie Life customers.”

For Zurich the deal will result in an increase in in-force premiums from $370 million to roughly $610 million. However while this will boost Zurich Australian market share by about 4%, it will continue to be behind the top five players in the life insurance sector which are TAL, AMP, AIA Australia, MLC and CommInsure. To find out more about Australia’s top life insurers click here.