Rumours swirl about TOWER Life sale

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[UPDATED] Rumours are circulating that TOWER is on the verge of selling its life insurance business to Fidelity Life – and is set to announce the deal later this month.

Thursday, March 7th 2013, 9:12AM 5 Comments

by Susan Edmunds

Over the past year it has sold both its investment and medical businesses.

In November, it sold its medical business to Australian listed company nib for $102 million. Last month, it sold its investment business, including its default KiwiSaver scheme, to Fisher Funds for $79 million – a deal that Fidelity Life had also been rumoured to have been interested in.

Speculation is mounting that TOWER will make more annoucements about its future and other asset sales at its annual meeting which is scheduled to be held in Auckland on March 21.

Advisers expect TOWER to sell the life insurance side of its business because it has not been re-investing in it and has not released any new products for some time. Also uncertainty about its future ownership is likely to impact on advisers' willingness to put business its way.

A number of other life insurance companies, including Partners Life, AIA and OnePath, have ruled themselves out buying the TOWER Life business.

When its TOWER Investments were sold last month, TOWER group managing director Rob Flannagan said the company wanted to focus on its core insurance business. Its biggest operation is its general insurance business which also includes Tower Financial Advisory Services.

TOWER has not yet responded to requests for comment.

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