Allianz says it is now the third largest general insurer in Australia - behind IAG and Suncorp - following the completion today of its $725 million acquisition of Westpac’s general insurance business.

The Australian arm of the German-owned insurer says in a statement today the completion of the purchase marks the start of a 20-year exclusive agreement to distribute general insurance products to Westpac customers.

The distribution agreement is part of the terms agreed to when the companies announced the deal in December.

“Under our 20-year exclusive distribution agreement, Westpac will continue to offer insurance under its own brands,” an Allianz spokesman told insuranceNEWS.com.au. “That insurance will be underwritten by Allianz Australia in a similar way we offer motor, caravan and trailer, and travel insurance products under Westpac Group’s brands.”

In addition to providing Westpac with motor, caravan and trailer, and travel insurance - which has been in place since 2015 - Allianz will now issue and service a range of personal insurance products, including home and contents, to Westpac Group’s brands.

“Today marks an important step in our strategy to grow our partnerships and consumer insurance portfolio in Australia,” Allianz Australia MD Richard Feledy said.

“Not only does this see Allianz become Australia’s third largest insurer, it also represents a significant growth in our talented team.

“We are thrilled to welcome our new colleagues into our organisation, knowing that our team and customers will benefit from their collective wealth of experience.”

Allianz says more than 350 staff from the Westpac general insurance team have joined the business as part of the acquisition. insuranceNEWS.com.au understands that figure represents the vast majority of the Westpac team, apart from some managers.

The Allianz spokesman says the employees have joined the insurer’s Consumer, Customer & Operations and Personal Injury teams, as well as the Technical, Finance, Corporate Governance & Legal and Risk & Compliance teams.

Allianz Australia now employs more than 5100 people in the country, the spokesman said.

Mr Feledy says the two partners share a commitment to simplicity and delivering customer-centric products and services.

“These aligned values have provided us with a strong foundation to build upon and we are excited to enter the next phase of our long-term partnership with Westpac,” Mr Feledy said.

Westpac says in a statement it expects to receive a further payment of $25 million in this calendar year, subject to integration milestones, with contingent payments over the next five years in addition to ongoing payments under the distribution agreement.

IBISWorld Senior Industry Analyst Yin Yeoh says the acquisition is a “major step” in Allianz growing its market share in Australia.

“Prior to the acquisition, Allianz is a major player in the personal lines market,” she told insuranceNEWS.com.au. “Competition in the industry is expected to increase.”

In a March report, IBISWorld said IAG has a 21.7% share of the general insurance market by revenue, Suncorp Group 12.6%, Allianz Australia 7.7% and QBE 7%.