The two companies have also signed a five-year referral agreement for new TSB insurance customers.
Tower has been providing insurance to TSB customers since 2004 under this insurance portfolio, which will be brought into the Tower Direct business following the transaction.
Upon the completion of the acquisition, Tower will directly insure the TSB customers under 18,000 Tower-branded policies. The policies will also be migrated to Tower's cloud-based digital platform under the agreement. Tower said that no action is required from customers, as it has always been the underwriter of these policies.
“This new acquisition follows the successful portfolio acquisitions of Youi NZ, Club Marine and ANZ that are delivering growth and efficiencies,” said Tower CEO Blair Turnbull. “We have enjoyed a positive relationship with TSB over many years and are very excited to continue the relationship in its new referral form.”
Premiums from the TSB portfolio contributed $11 million in FY21 to Tower’s GWP.
No regulatory approvals are required to proceed under the agreement and the acquisition is unconditional, with completion expected on July 1, Tower said.
In February, Tower paid $560,000 to Westpac to acquire a smaller legacy portfolio of insurance policies issued to Westpac customers.
“Both transactions are further examples of Tower leveraging its unique partnership model and scalable technology platform, to provide simpler and easier experiences for its customers and partners,” Turnbull said.