Ralph Stewart's variable annuity business nearly there
The Reserve Bank has opened the market for variable annuity products which will help provide income to people in retirement. The first product is likely to hit the market soon, once former AXA chief executive Ralph Stewart completes a round of capital raising for his new company.
Monday, April 27th 2015, 8:58PM 
2 Comments
The Reserve Bank has issued an industry-wide solvency standard for variable annuities.
This is a consequence of the work Ralph Stewart kicked off over two years ago and means any licenced insurer in New Zealand who complies with the new standard to the satisfaction of the Reserve, could issue modern variable annuities in New Zealand.
Stewart is pleased with the standards produced by the Reserve Bank and that they will enable companies to provide products which allow New Zealanders to purchase guaranteed retirement income products that are flexible, tax-effective and offer minimum income levels based on returns from growth and income assets.”
“New Zealand is experiencing a significant change in the structure of its population. The number of people aged 65 and over has doubled since 1980 and may double again by 2036. The fastest growth will occur between 2011 and 2036, as the baby boomers move into the 65-plus age group.”
Stewart says the standards are “forward-thinking” and “sensibly conservative”.
One of the pleasing things, he says, is that the Reserve Bank will adjust solvency requirements over time and may relax them when an issuer continually demonstrates good risk management.
Stewart is in the market with a Foundation Shareholder offer to complete the capital raising efforts.
This offer aims to raise $2.25 million and closes on the 22 May, minimum investments of $50,000 are being offered, once completed the original founders of the business, will own 45% of the company; foundation shareholders will have 29% and new founders’ equity will account for 26% of capital.
The company offering the equity is the Retirement Income Group (RIG). It in turn owns the two operating companies - Lifetime Asset Management (the PIE Issuer) and Lifetime Income Limited (The insurer).
Lifetime Asset Management is launching a new fund the Lifetime Income Fund, which also includes longevity insurance provided by Lifetime Income Limited.
Under the offer, up to 45 wholesale investors can subscribe for parcels of 50,000 shares, at $1 per share, in the Retirement Income Group.
The former name, NZ Income Group is no longer being used.
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Comments from our readers
Fair to say lifetime is used by a number of advisors and advisory groups in NZ which you are clearly aware off.
It's a great name and for us it is ideal. Prior to launch we asked our legal advisers (DLA) to review and while in no way absolute it was felt that the distinction between The Lifetime Income Fund being the offer of a product and the other users offering advice was a practical distinction between users of the brand. As you note, this is however a very complex area.
Regards Ralph
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