NZF looks to insurance to diversify business
Finance company NZF Group is looking to diversify its product offering with a new insurance range targeted at domestic customers.
Tuesday, August 25th 2009, 9:56PM
by Paul McBeth
The company will offer the range home, contents and car insurance range, which will be underwritten by Lloyd's of London, through mortgage brokers in the coming weeks, but has yet to elaborate on the details.
"The new insurance products will basically be targeted at domestic people, not businesses," said Dave Shatford, general manager of investments and insurance. "We see mortgage brokers as a key part of our distribution" and more products NZF can offer brokers should increase loyalty to the company, he said.
Still, Shatford said home loans was going to continue as the company's core business, and while he expects decent uptake in the insurance products, he doubts it will be a major portion of the company's earnings.
Chairman Richard Waddel told shareholders at the annual meeting last week the company needed to diversify its business and move away from "total dependence on finance company operations," by offering home loans and leveraging its new KiwiSaver business through Huljich Wealth Management.
The finance company reported a $3.4 million loss for the 12 months ended March 31, from a $3.9 million profit a year earlier.
NZF grew its loan portfolio to from $246 million to $263 million over the 2009 financial year, and boosted its total assets 3% to $291 million.
Waddel told shareholders the company had increased its loan book 23% while debenture stock fell 7.6% after the deposit guarantee scheme, and called for more certainty government scheme. Finance Minister Bill English yesterday announced an extension for the scheme until December 2011.
He said the company had seen a reduction in the approval of loan applications as it moved to more conservative lending criteria, and had felt a continued decline in property broking business caused by the fall in residential sales.
Paul is a staff writer for Good Returns based in Wellington.
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