Tower has been underwriting insurance for Kiwibank customers since 2006, and premiums from the Kiwibank portfolio contributed $12 million to Tower’s GWP for FY22.
According to Tower, since it is the original underwriter of these policies, no action is required from customers. In the future, GWP from these policies will be reported against the Tower Direct channel, rather than the Tower Partnerships channel.
“The completion of this deal brings an end to our strategy of acquiring legacy insurance books and migrating them to Tower Direct,” said Tower CEO Blair Turnbull. “Since February 2021, Tower has agreed to purchase books for a total price of $26 million from ANZ, Westpac, TSB and Kiwibank, ending commission payments and enabling us to have a direct relationship with these customers, who represent more than 88,000 risks. Previously, Tower paid total commission to these partners of around $11 million per annum.”
No regulatory approvals are required for this transaction, which is unconditional. Tower expects the deal’s completion on Dec. 1.
“Having completed our legacy book acquisitions, we are continuing to focus on building our progressive partnerships model, with both new and existing partners including TradeMe Insurance, TSB, Ray White, NZ Financial Services Group and NZ Defence Force,” Turnbull said. “By securing mutually beneficial partnerships for customers we aim to drive significant, sustainable growth.”
