The CEO of AA Insurance
has joined the growing ranks of opponents speaking out against the IAG
bid for Lumley
Echoing the sentiments of partners Vero
, who slammed the move earlier this week, CEO Chris Curtin
told Insurance Business
in a statement that the Lumley
acquisition will be enough to push the industry over the tipping point.
“We believe the acquisition will only strengthen the domination of one company in our industry without any apparent benefit to customers.
“The personal insurance market is at a tipping point where competition is achievable, but we believe the Lumley
acquisition will be enough to push the industry over that point.
“We consider it crucial to have a number of strong and evenly matched industry leaders for customer choice, affordability, industry stability and competition. We believe the proposed acquisition of Lumley
is counter to these principles.”
was launched in 1994 and is a joint venture between New Zealand Automobile Association and Vero
New Zealand, which is part of the Suncorp Group.
It employs around 580 staff servicing more than 300,000 customers and manages over 500,000 motor, home and contents insurance policies.
Curtin said while they have the ‘utmost respect for IAG
’ the timing of the bid couldn’t be worse which is why their concerns are significant.
“The bid comes at a time when we are trying to rebuild our industry, after the global financial crisis and the earthquakes, and regain the public’s trust,” he said.
“A key factor in rebuilding trust is whether we can provide confidence that the insurance industry is competitive enough to keep insurance affordable.
’s bid for Lumley
comes two years after its purchase of AMI
. Although that transaction gave IAG
a dominant market position, which posed potential risks, it assured the wellbeing of AMI
customers, which was paramount.
“It also solved a potentially large problem for the New Zealand Government and taxpayers.
’s bid for Lumley
NZ is entirely different from the acquisition of AMI