Kiwibank's life insurance aspirations
Kiwibank says it plans to launch into the life insurance market by the end of the year but it has been selling risk since it started in 2002.
Thursday, August 23rd 2012, 4:34PM
by Jenny Ruth
Kiwibank also promotes its life insurance offering on its website,
In releasing the bank's annual results, chief executive Paul Brock said it plans to sell life insurance through the Kiwibank branch network and has put in place systems and processes and a separate board for the insurance operations.
"It's a relatively small investment in the scheme of things," Brock said. "It will become quite profitable relatively soon," but he added to didn't wish to put any timetable on this.
In response to questions from Good Returns, "Kiwi Insurance writes life and disability-related risk products in its own name and has done so since 2002," Kiwibank spokesman Bruce Thompson confirms.
"Previously, it was heavily dependent on oursource provides but is now moving to an in-house manufacturing model," Thompson says.
"This shift commenced in 2011 and is continuing now. We intend to have an in-house manufactured broad market product available at the end of this year," he says.
Kiwibank currently sells its term life product in partnership with Cigna Life. Cigna chief executive Gail Costa confirmed its relationship with Kiwibank will cease at the end of October. "They're going their own way," Costa says.
Thompson says Kiwibank hopes to "significantly ramp up our market penetration by utilising a diverse range of dirstribution methods."
Financial Services Council (FSC) figures show Kiwibank has been writing more than $500,000 in new term life business each quarter for the past four quarters including $535,000 in the three months ended June 30.
Kiwibank's lapses and surrenders were $335,000 in the June quarter and its in force business at June 30 was $7.9 million, accounting for 0.55% of in force business held by FSC members.
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