Fidelity Life Assurance Company has purchased most of life insurance business from New Zealand insurance company Tower in a deal valued at approximately NZ$189m ($159.54m).
The deal has enabled Tower to concentrate on general insurance business, while the same has strengthened Fidelity's life insurance business in the country.
The acquirer specializes in life insurance, personal protection, business insurance, savings, investment and KiwiSaver.
Based on the terms of the agreement, Tower will market most of its non-participating life insurance policies and retain the capital currently held against those policies.
Apart from this, it will also retain its participating book and other run-off life insurance assets, which have an embedded value of $23m.
Commenting on the deal, Tower Group Managing Director Rob Flannagan said the company now can concentrate on delivering quality general insurance products and services to customers in New Zealand and the Pacific Islands, leveraging off its strong market position.
He further said that the sale was part of the company's strategic review of the business, which will maximize value to its shareholders.
Pending receipt of regulatory approvals as well as satisfying customary closing conditions, the transaction is likely to complete during July 2013.