The financial services industry in New Zealand has seen not only a regulatory overhaul in the past couple of years but also a refocus among banks and a growing appetite among insurers for deals. Partners Life chief and appointed actuary Kate Dron (pictured), whose camp has recently had its own set of M&A (mergers and acquisitions) transactions, believes the dust hasn’t settled on this front.
“I don’t think the consolidation has finished yet,” Dron told Insurance Business. “I actually think there’s probably a couple more transactions likely to come through.”
Dron said: “What we’re doing is we’re bringing the manufacturing back into the insurance company who really understands it, but you’ve still got those distribution channels.
“Most of the companies have got these relationships with the bank, and that basically allows those bank customers to still access the insurance product but probably in a better way in terms of the advice that they’re now going to get around that.”
With the addition of the BNZ Life portfolio, Partners Life now has a client base of 300,000 people.
The refocus within the financial services space, facilitated by the ongoing consolidation, helps in achieving fair outcomes for customers, in Dron’s view, with lenders and insurers leveraging their respective strengths.
“Focussing on the things that each [sector] does well, and then doing that together – I think that’s what’s really important,” the chief actuary told Insurance Business. “Basically, no advice is provided by the bank; the bank just gives us some leads.
“They’ve got people who have said, ‘yes’, they’re interested in getting insurance cover; they pass them over to us, and then we can handle that whole process and make sure that the customer understands what they’re getting and that they’re getting the right product for themselves.”
This market development comes at a time when some policyholders may be rethinking the covers they have in place amid inflation and a need to tighten purse strings; not to mention the persistent underinsurance problem in the country.
“It’s not even necessarily that the price of the insurance product is going up – it’s your groceries are going up, your petrol is going up, your mortgages are going up,” Dron said.
In the case of Partners Life, insurance costs for its policyholders are actually going down, with initiatives to reduce premiums currently in effect.
Dron told Insurance Business: “The conversation that we are having around the table now at an executive level and with the board is very much around making sure that what we do is fair for all customers and that we’re treating them equitably.”
On the issue of underinsurance, she had this to say: “We need to be able to provide options out there for our customers, and we need to be able to do that in a way that’s affordable to them. With changes that we’re making, we’re trying to step in the right direction in terms of actually looking at some of the things that we can do.
“How do we access those people out there who currently don’t even think about life insurance and it’s just not even on their radar? It is looking for solutions we can provide to those people so that they at least have a level of cover. [But the underinsurance problem] isn’t a problem that the insurance industry by itself can solve; it’s one of those things that we’ve got to work with the regulators and the government.”
In addition to helping out customers, Partners Life’s move to lower its prices was partly attributed to the BNZ Life and Dai-ichi Life transactions, which Dron said “really put a good lens on our business” and pushed the insurer to examine where it could be better and more efficient.
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