Westpac announced last week its New Zealand life business will be sold for $NZ400 million ($374 million) to Fidelity Life Assurance Company.

The announcement follows the completion of the sale of its Australian general insurance arm this month to Allianz for $725 million. Since May last year, the lender has been undertaking a strategic review of its non-banking operations.

The bank says it expects to book a post-tax gain from the sale of Westpac Life NZ, which had annual in-force premiums of $NZ149 million ($139 million) as at March 31.

Westpac will distribute life insurance products to its customers as part of a 15-year exclusive agreement with Fidelity. In return Westpac will receive ongoing payments for the distribution arrangement as part of the terms of the sale agreement.

CEO Peter King says the sale is part of the bank’s ongoing program to simplify its business portfolio.

“This transaction is the latest step in simplifying our business while continuing to help customers with their life insurance needs,” Mr King said.

“Life insurance products are important for many New Zealanders and we are pleased to be entering a long-term partnership with a life insurance specialist to continue to help our customers protect themselves and their loved ones.”

Westpac says the sale is expected to complete by the end of the year, subject to regulatory approvals.