03 Feb 2020
ANZ has just completed one of the most complex business reconstructions in recent Australian financial services history, signing off on the separation of its life insurance, superannuation and financial planning businesses.
Formerly comprising ANZ’s wealth management division, the clear and final separation was necessary for sale of the life business to Zurich and the broader pensions and investments (P&I) and aligned adviser businesses to Insignia (formerly IOOF).
“To ultimately separate and complete the sale and subsequent separation transactions, sweeping and complex changes were required across the life insurance, superannuation and the advice businesses to achieve the simplified ANZ.”
The multi-year project, a key stage of ANZ’s strategy to simplify the bank, was completed on time and on budget. It was charged with removing the superannuation business from the life company which involved transferring products, customers, processes, systems and staff. It was like unravelling a pot of spaghetti into separate bowls.
Overall, the project involved the transition of 3,500 staff, $A50 billion of funds and more than 3 million customer accounts.
Prior to 2019, ANZ Wealth was highly integrated both operationally and legally across distribution channels, administration and servicing, investment management and all enabling functions including technology and finance.
The initial decision to sell the Wealth division did not contemplate a split of Life Insurance from Pensions, Investments & Advice. To ultimately separate and complete the sale and subsequent separation transactions, sweeping and complex changes were required across the Life Insurance, Superannuation and the Advice businesses to achieve the simplified ANZ.
Moreover, since the transactions were originally announced in late 2017, the project had to manage the Australian Royal Commission into financial services, regulatory action against one of the acquirers and the COVID-19 pandemic.
Dealing with the complexity of the transaction and the adversity of the pandemic was certainly a challenge. As was the task of separating technology, migrating data and creating new systems.
And, crucially, ANZ now has no ongoing service obligations – this has been a completely clean separation unlike similar transactions in the industry.
The simplification and sale of parts of the wealth businesses was a core element of ANZ’s ongoing simplification strategy and desire to partner with large scale, specialist providers to offer a range of quality products and services to ANZ customers.
Broadly, there were three stages to the separation which commenced in 2019 (following necessary formal approvals). Initially, the business had to be separated into two distinct units. This entailed creating a so-called “neutral territory” data centre to house the information before it was transferred to the new P&I owner, Insignia.
The centre – which came to be known as “Switzerland” – housed the information until ANZ removed all data and information that didn’t pertain to the P&I transaction before it was transferred to Insignia. The insurance business separated from ANZ in May 2022 and P&I in October 2022.
From a technological point of view the P&I separation transferred 850 servers, 149 wealth applications and 543 supporting applications. While the insurance separation saw about 2.2 million policies and 2000 group plans with more than 500,000 members transferred securely to Zurich.
More than 2000 contractual artefacts were treated with more than 200 sourcing activities executed.
For ANZ, the simplification also delivered considerable innovation and a match-tested “playbook” for undertaking projects of such scale and complexity. Project innovations were developed and employed such as digital forensics for records management, Customer Data Mart, Cloud for Data Migration and ChangeScout for change management delivery.
The ANZ of today is a vastly simpler, more capital efficient bank and the project to separate, remake and sell the wealth division has been one of the most important steps in that process. And it was undertaken with a vital emphasis on the welfare of the staff involved and clear communications.
This complex people, change and communications program will have touched around 3500 Wealth employees over six years across Australia, Bengaluru and Manila. The people and change programs delivered a multitude of communications alongside 13 people transitions of around 2500 people to two new employers since 2018.
Guiding people-principles the team has adhered to include continually keeping our people and our values top of mind with a consistent approach, communicating information promptly, concisely and authentically.
Ultimately the project established a successful playbook for how a large organisation like ANZ can undertake complex demergers and separations while delivering for our customers, our people and our investors.
Craig Brackenrig is Head of Wealth and Adam Crook is Program Director of the Wealth Separation at ANZ.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
03 Feb 2020
03 Feb 2020