Tower Australia has agreed to acquire PrefSure Holdings and Life Limited from South African insurance group Liberty for $145 million.

The merger, effective from March 1, means the new entity will be in the top five of Australian life insurance companies.

Tower Group MD Jim Minto says the purchase will establish the company as a market leader in the Australian life industry.

“The purchase is in line with the group’s strategy to grow both organically and through strategic acquisition where unique value can be added,” he said.

Tower Australia spokesman Rod Metcalfe told Sunrise Exchange News PrefSure is a specialist life insurance business with annual premiums of more than $270 million with “a particular strength” in providing life insurance to master trusts.

“Combined funds under management for these master trust customers are in excess of $60 billion,” Mr Metcalfe said.

“PrefSure employs 160 staff and is unique in the way it complements Tower’s existing business,” he said. “Tower has a strong position in individual life insurance business lines, whereas PrefSure’s strength is in the key master trust sector.”