Allianz has agreed to acquire the general insurance business of the Australian banking group Westpac in a transaction valued at A$725m ($534m).

As part of the deal, German insurer has inked a 20-year exclusive agreement for the distribution of general insurance products to Westpac customers.

After the closure of the transaction, Allianz intends to expand its current general insurance distribution arrangement with Westpac. This will enable Westpac to offer a range of Allianz general insurance products to its customers.

Under the new distribution agreement, Allianz will issue and service a range of personal insurance products, including home and contents, under Westpac Group’s brands.

Allianz, which signed bancassurance partnership with the lender in 2015, currently provide motor, caravan and trailer and travel insurance offerings to Westpac customers.

Allianz Australia managing director Richard Feledy said: “Westpac has been a long-term business partner for Allianz and we are very pleased to enter into this new agreement.

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“Allianz is a proven bancassurance partner, both globally and locally, and we are committed to further investing in this channel. By combining our insurance and digital expertise we are able to provide valuable protection to Westpac’s customers.”

The deal, subject to receipt of regulatory approvals, is expected to close in mid-2021.

In October this year, Allianz was reported to be in advanced negotiations to buy Westpac’s general insurance arm.

The unit offers home and car insurance policies for Australians and has registered $600m in premium revenue over the past year.

The deal is considered a vital step for Allianz in growing its consumer insurance portfolio in Australia.

In September this year, Allianz and East African insurance group Jubilee Holdings have signed an agreement to form a strategic partnership in the five African countries where the latter currently operates.