Tower Limited’s takeover of Westpac NZ’s general insurance underwriting, effective July 1, ends more than three decades in which IAG NZ held the relationship and hands Tower access to one of the four major banking distribution channels in the country’s home and motor insurance market. The switch, and an accompanying feature giving Westpac customers in-app access to Tower’s natural hazard risk data, was confirmed in a Westpac NZ statement dated July 1, 2026.
The financial terms of the arrangement, including any commission Tower pays Westpac, have not been disclosed. But the scale of what has changed hands can be estimated from public reporting. IAG NZ’s most recent annual results, for the year to June 30, 2025, put group gross written premium at AU$3,807 million, with the insurer covering roughly one in two New Zealand households and more than NZ$1.07 trillion in assets, according to IAG New Zealand’s FY25 results release. IAG’s bank partnership channels contributed NZ$616 million in premium growth in its most recent reporting period, with Westpac estimated to represent NZ$150 million to NZ$200 million of that figure. Tower, by contrast, reported GWP of $600 million for its year to Sept. 30, 2025, up 2% on the prior year, with customer numbers at 318,000 and home insurance policies up 11%, according to Tower’s results announcement lodged with the NZX on Nov. 27, 2025. The same filing set FY26 GWP growth guidance at 5% to 10%.
According to Interest.co.nz, Forsyth Barr analysts James Lindsay, Will Twiss, and Georgio Toulis estimated that if Tower captures 35% of Westpac’s existing insurance book, the deal could add approximately NZ$70 million in GWP by 2030 – a figure that would represent a meaningful step toward Tower’s FY27 GWP target of $656 million. The same analysts cautioned that immediate changes to GWP are not expected, and that it remains to be seen how many existing Westpac customers will actually switch from IAG to Tower cover rather than simply renewing as before.
The change followed a request for proposal process run by Westpac NZ, according to Westpac’s original partnership announcement of Sept. 26, 2025. Westpac has not disclosed the specific criteria used to evaluate the RFP; in that announcement, Westpac NZ managing director of product, sustainability, and marketing Sarah Hearn characterised Tower’s offering as having “impressed us with their great digital offering and competitive pricing.” IAG NZ participated in the RFP but was not selected, and said at the time: “Naturally, we are disappointed by the outcome of Westpac’s RFP process.”
The loss leaves IAG NZ underwriting general insurance sold by ASB, BNZ, and The Co-operative Bank, alongside its own AMI, State, NZI, and Lantern brands, according to IAG New Zealand’s company website. ASB’s own website confirms this arrangement remains current, describing IAG as the underwriter of its home, contents, landlord, and vehicle insurance. Westpac was one of four bank distribution relationships IAG held in New Zealand; its departure narrows that list to three, while giving Tower – previously a smaller, largely direct-to-consumer insurer – its first major bank partnership at this scale.
The switch coincides with the Conduct of Financial Institutions (CoFI) regime, which came fully into force on March 31, 2025, and requires both Westpac and Tower, as licensed financial institutions, to maintain fair conduct programmes covering their dealings with consumers. Under FMA guidance on intermediated distribution, that obligation extends to arrangements where one financial institution distributes another’s products under its own brand – meaning Westpac and Tower share responsibility for ensuring the underwriting handover, and any communication to affected customers about it, meets the fair conduct principle. IAG’s own direct communication to Westpac policyholders following the July 1 transition is one visible instance of the kind of transition messaging that principle is meant to ensure, though no statement from either company specifically addressing broader CoFI compliance for this transition has been identified in the sources reviewed for this article.
For Westpac’s general insurance customers, the practical transition is limited for now. In a statement issued July 1, 2026, following Westpac’s transition announcement, an IAG New Zealand spokesperson said: “For existing Westpac insurance policyholders, nothing changes. Their insurance remains fully in place, and they do not need to do anything. IAG New Zealand will continue to renew policies, provide customer service, and manage claims as usual.” The spokesperson added that IAG “will be in touch again when it is time for their insurance to be renewed,” that customers with questions in the meantime “are, of course, more than welcome to call us at any time,” and confirmed IAG “will be offering renewals to all current Westpac insurance policyholders at the expiry of their insurance policies,” as agreed with the bank. New policies sold by Westpac from July 1 are underwritten by Tower.
The customer-facing change is the natural hazard data tool, which pulls Tower’s property-level flood, earthquake, sea surge, and landslide risk assessments into Westpac’s banking app at the point of quote. Tower chief executive Paul Johnston said pricing under the new arrangement will be calculated on the risk profile of the specific property being insured. Whether that data-driven pricing approach shifts a meaningful share of Westpac’s existing book toward Tower, rather than customers simply defaulting to renewal with IAG, is the open question flagged by Forsyth Barr’s analysis – one that will only be answered over the life of the five-year agreement.
