1 Jul 2014

Tower sells out of life insurance

1:22 pm on 1 July 2014

Tower insurance has done a U-turn and sold the remaining part of its life insurance business to a private company for $36 million.

Private firm Foundation Life, which specialises in managing non-active life insurance policies, is awaiting regulatory approval to buy Tower Life.

Tower has been selling business not related to its key general insurance operations in recent years.

Last year, it sold the majority of its life insurance business to Fidelity Life for $189 million then, in January this year, it told the market it would hold on to the rest.

However, Tower chief executive, David Hancock, says Foundation Life had since approached Tower with an impressive offer, and Tower changed its mind.

Settlement is likely to happen in August, pending approval from the Overseas Investment Office and the Reserve Bank.

There will be no changes to existing policies for Tower Life customers as a result of the sale.