CBL Insurance: Everything you need to know
Years in operation: 35+
Types of services: Credit surety and financial risk provider
Product categories: 7
Head office: Auckland
CBL Insurance is one of New Zealand’s oldest credit surety and financial risk providers, and has been operating in the New Zealand market for over 35 years. The company was purchased by its present owners in 1996.
CBL’s initial primary area of expertise was in contractor and construction bonds, but over the years the insurer’s offering developed to include builders warranty products, property deposit and rental guarantee bonds, travel and cargo agents and reinsurance support. It also gained expertise across the areas of event financing, passenger protection, student fee insurance and pet insurance.
CBL Insurance worked with domestic and international insurance brokers, collaborating with them to structure a solution which complies with local insurance laws and financial rating requirements.
In 2018, CBL Insurance was placed into liquidation by the Reserve Bank of New Zealand. In a review of CBL Insurance, the Reserve Bank’s head of prudential supervision stated that the insurer had been ‘insolvent for some years’, and the Reserve Bank appointed interim liquidators in February 2018.
In June 2018, the Reserve Bank announced that the Serious Fraud Office (SFO) had commenced an investigation into CBL and its associated entities, and would be probing issues of market conduct and disclosure. Auckland High Court officially placed CBL into liquidation in November of the same year.
In July 2019, CBL’s former managing director Peter Harris said that poor communication from the Reserve Bank was a “major stumbling block” for the insurer, and that RBNZ officials did not fully understand the commercial realities facing the firm. He stated that a commercial solution could have been found for CBL.
CBL Insurance in the news
1992 – The current owners of CBL purchase the company from its previous owners
2015 – CBL Insurance appoints Bancorp Corporate finance to ‘assess its options’ in what is widely regarded as a move signalling an IPO
2016 – CBL reports a $59.9 million operating profit for the 12 months ending December 31, 2015
2017 – CBL sells 20 million shares, or 8.5% of its issued capital to increase market share liquidity
2018 – A.M. Best downgrades CBL’s credit rating
2018 – CBL’s chief operating officer leaves, and the High Court places the insurer into interim liquidation. CBL’s directors insist that the company is still solvent, despite being placed into interim liquidation
2018 – CBL is placed under investigation by the Serious Fraud Office, liquidators are appointed
2019 – CBL hits out at the Reserve Bank, citing poor communication and saying that a commercial solution could have been found
Key people as of 2019
Peter Harris – Managing Director
Harris participated in CBL’s buy-out in 1996, when he was initially head of sales and international revenue. He was appointed managing director in 2007. Before joining CBL, Harris was an investment banker and a director and shareholder in General Capital & Commerce.
Harris is a director of the Latin American New Zealand Business Council, and is a member of the NZ Institute of Management and the Spirit of New Zealand Foundation.
Alistair Hutchinson – Deputy Chairman
Hutchinson also participated in the 1996 buy-out of CBL, and has a background as an economist. He also has expertise in financial services, public administration and micro lending.
He was previously a member of the Board of Governors, World Bank, International Monetary Fund and Asian Development Bank, and also held the role of Financial Secretary of Samoa.