Kiwi insurer Tower to acquire legacy portfolio of ANZ
Tower, a Kiwi insurance company, will pay NZD 14 million in cash to ANZ to acquire and assume the latter’s rights and obligations pertaining to servicing a portfolio of insurance underwritten by it.
The deal enables the legacy portfolio to be brought into the Tower Direct business.
Tower said that it had provided insurance for customers of ANZ and National Bank between 1990 and 2009 and continues to cover more than 23,000 people under those policies.
Post-acquisition, the customers will be insured directly by the Kiwi insurer under a Tower branded policy. Tower said that the customers have always been insured by it under these policies and that will not change following the acquisition.
Tower CEO Blair Turnbull said that the acquisition generates positive value for the company and its shareholders by ending all future commission payments to ANZ on the portfolio.
Premiums from the ANZ portfolio generated NZD 40 million in FY20 to the gross written premium of Tower.
The deal also facilitates the migration of the customers to Tower’s cloud-based, digital platform, which is expected to offer them a more expansive and modern product range.
Blair Turnbull said: “We have a tried and true method to migrate customers from legacy platforms and products to our new technology, which improves the customer experience and delivers scale efficiencies. We adopted this successful acquisition strategy with Youi NZ, Club Marine and now ANZ.”
The deal is expected to close on 12 March 2021 as it doesn’t need any regulatory approvals and is also unconditional.