IAG has completed its takeover of Christchurch-based insurer AMI after the Reserve Bank of New Zealand (RBNZ) approved the deal.

The transaction is expected to generate at least $NZ30 million ($24 million) a year in net synergies within two years, according to IAG.

Approval from the RBNZ, the country’s insurance regulator, cleared the final hurdle to the $NZ380 million ($301 million) takeover. IAG will not be responsible for existing and future Canterbury earthquake liabilities, which the Government will take over.

The bank has also granted AMI a full insurance licence.

AMI has 500,000 policyholders and writes about $NZ360 million ($286 million) in annual premiums.

It incurred massive liabilities from the Canterbury earthquakes, and had been on the market for several months before the sale to IAG was announced in December.

IAG NZ CEO Jacki Johnson says AMI “fits well with our strategic direction and has such a strong market presence, together with loyal customers and dedicated professional staff”.

The NZ Commerce Commission had previously approved the merger, saying the acquisition is not likely to lessen competition substantially in the home and motor vehicle insurance markets.