Congratulations to CIGNA, Gail Costa and her team should be proud of the deal to acquire OnePath Life. CIGNA's statement covers some of the details:
"Cigna and ANZ have entered into an agreement for Cigna to acquire OnePath Life NZ Ltd. This presents a rare opportunity to significantly grow our business – making us the third largest life insurance provider in New Zealand, with a combined staff of around 500. The acquisition is subject to regulatory approval and it is expected to take 6-9 months to complete the transaction.
The purchase includes a 20-year strategic alliance for Cigna to distribute insurance products via the ANZ bancassurance channel. In addition, Cigna will also acquire OnePath’s wealth specialist and independent adviser channels, which substantially broadens our distribution capability. This acquisition will more than double our size, and enable us to offer wider solutions and become more agile and responsive to our customers’ needs.
We see the OnePath business as a great complement to our existing business. We are aligned on the importance of people, culture and a philosophy of doing right by customers.
This investment in our business is a clear indication that Cigna Corporation is committed to growing our business in New Zealand and has confidence in our ability to execute this transaction."
At this stage that leaves the option open for CIGNA to operate in the adviser market by continuing OnePath Life's offer in some form. It also adds more bank distribution, an area in which CIGNA is already skilled at managing.
The acquisition by CIGNA of OnePath represents another datapoint in a new trend - the return of a once-specialist insurer that had been sold to a bank, back to ownership by a specialist insurer. The same dynamic was at work in AIA's acquisition of Commonwealth Bank's insurance businesses. Other similarities may be found, but the differences are more significant. OnePath is large, but not the scale of Sovereign.
For those of you with a focus on the advice market, you may have to refer to the quarterly life report to refresh your memory as to the size of the CIGNA business: $86million in-force at the end of December 2016, compared to OnePath Life's $199m in-force at the end of September 2017. But internationally, CIGNA dwarfs OnePath Life, of course, and can bring skills and expertise from around the world to help maximise the opportunity. The deal gives CIGNA enhanced access to the channels that currently make up about 60% of all new business production.