Commonwealth Bank (CBA) has completed the sale of its wholly owned New Zealand insurer Sovereign to AIA Group for $1.27 billion.

The sale is part of the larger sale of CommInsure Life to AIA for $3.8 billion.

AIA will provide life and health insurance products to CBA customers in New Zealand in a 20-year partnership.

CBA CEO Matt Comyn says the sale is a key step in creating a “simpler, better bank” focused on its core banking franchise in Australia and New Zealand.