ANZ says its main focus will be retail and business banking after selling its life and consumer credit insurance business to international insurance giant Zurich for $2.85 billion.

The bank’s sale of OnePath Life completes what it describes as the “simplification” of its wealth management division, after selling its pensions and investments business to IOOF for $975 million in October.

ANZ chief executive Shayne Elliott said the bank is more than halfway through its plan to create a “simpler, better balanced bank” focused on retail and business banking in Australia and New Zealand.

“It all goes back to this really simple philosophy that in a complex world, we know that our customers are busy and just want us to help them out,” Mr Elliot said.

“The way to win for our customers and our shareholders is to do a few things and do them incredibly well.

“We’re really clear on what those few things are and essentially we are just exiting, shrinking or partnering on everything else.”

The life insurance deal, which remains subject to regulatory and other approvals, will result in Zurich becoming Australia’s largest retail life insurer as measured by premiums, with more than 1.5 million customers and 19 per cent of market share.

Zurich – which purchased Macquarie’s life insurer last year – has entered into a 20-year agreement to offer life insurance products through ANZ’s distribution channels.

ANZ said its current insurance policies, including general insurance products provided via QBE, will not change under the new deal.

Mr Elliot said customers would still be able to access life insurance products at ANZ branches, online, or through a call centre, and the only change would be the manufacturing and management of those products.

He also hinted that the bank would consider returning capital – made from both the Zurich and IOOF transactions – to shareholders through either dividends or share buybacks if there is money left over following regulatory and other business costs.

The life insurance business had a carrying value of $3.38 billion, meaning ANZ will recognise an accounting loss of about $520 million on the deal.

ANZ is the third major bank to sell its life insurance business after Commonwealth Bank sold AIA Group in September for $3.8 billion, and National Australia Bank sold 80 per cent of its life insurance business to Japan’s Nippon Life for $2.4 billion in 2016.

Zurich chief executive for Asia Pacific Jack Howell said Australia was an attractive market due to its strong economic growth, relative stability and advanced market.

Zurich and ANZ have forecast to complete the deal by November 2018, and expect full separation from the bank by 2020.

ANZ shares gained 32 cents, or 1.1 per cent, to $28.82.