ANZ New Zealand’s investment management business is not part of the sale.
OnePath had $200m of in-force premiums at June last year.
ANZ New Zealand chief executive David Hisco said the sale included a 20-year strategic alliance for Cigna to provide insurance solutions for ANZ bank customers and was consistent with ANZ’s strategy to simplify its business.
“Under this agreement, ANZ will continue to provide life insurance to our customers but these insurance policies will now be manufactured and managed by a world-class insurance provider in Cigna,” he said.
“This is consistent with how we provide motor vehicle, home, commercial and travel insurance using a range of specialist insurance partners,” Hisco said.
OnePath Life policyholders in New Zealand will continue to receive the cover they hold under the terms of their policies and it is intended all staff involved would be offered similar roles with Cigna or ANZ.
Cigna is a global health service company with 95 million customers around the world and more than 40,000 employees worldwide.
In New Zealand it offers insurance products online and through direct marketing and also provides insurance products for partner companies. Cigna has been one of ANZ’s insurance partners for more than 20 years.
Cigna New Zealand chief executive Gail Costa said the acquisition and strategic alliance diversified Cigna’s distribution capabilities: “Cigna provides simple, affordable insurance products to meet the needs of its customers. This acquisition will enable us to provide broader solutions and be more agile and responsive to a larger customer base.”
Russell Hutchinson, of Quality Product Research, said it would be interesting to see whether Cigna started to use the adviser distribution channel.
"They are at the very least taking a good look and appropriate it with a positive mind."
Cigna had noted it was taking on the ANZ adviser force and expanding its distribution network.
Advisers should expect the OnePath products would continue to be available to them, at least for the time being, Hutchinson said.
Cigna was very experienced at dealing with banks to distribute insurance, he said.
"It's still possible that Cigna might decide the adviser channel is not the right fit for them.
"The right approach [for advisers to take] is to mirror the approach Cigna is taking and approach it positively, thinking 'this could be interesting'."
Commentator David Whyte said ANZ should be pleased with the "very generous" deal. "It gets rid of another problem for them."
Partners Life had been interested in picking up the business but Whyte said it was not clear they had the resources to do so.
The transaction represents a slight premium to embedded value and is expected to generate a gain on sale of around $50 million, increasing ANZ Group’s Level 1 and Level 2 CET1 ratios by ~5 basis points and ~15 basis points respectively.