Challenger has signed an agreement to acquire Australia-based SMSF actuarial certificate provider Bendzulla Actuarial for $25 million.
Through this deal, Challenger plans to work with Bendzulla to expand its service offerings to SMSF customers and their accountants.
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The acquisition, which is scheduled to complete in January 2014, will meet the required 18% pre-tax RoE hurdle, and will be funded from cash reserves.
The deal comes as part of the Federal Government plans to consider the barriers to developing longevity insurance products as part of a broader review of the regulatory arrangements for retirement income streams.
According to Challenger, Bendzulla has a market share of more than 50% serviced through relationships with approximately 5,500 accounting firms.
Brian Benari, chief executive of Challenger, said: "Bendzulla is a strategic investment for our company in terms of SMSF retiree research, product and service development and distribution. While all retirees value secure income streams, SMSF retirees tend to be more aware of longevity risk.
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By GlobalData"Longevity insurance products like deferred lifetime annuities are likely to hold appeal for SMSFs if designed with their particular needs in mind. We look forward to contributing to the Government’s post-retirement review," Benari added.
