nib set to expand into life insurance
Health insurer nib is buying Kiwibank's life insurance business which will see it expand into the life insurance market.
Monday, November 8th 2021, 2:04PM 
1 Comment
nib's Rob Henin.
Following the trend of other banks, Kiwibank's parent company, Kiwi Group Holdings, has decided to sell its life and living insurance business to nib for $45 million.
Currently Kiwibank offers income protection, trauma, life insurance and funeral expense cover.
nib New Zealand chief executive Rob Hennin says the company has been looking to move into other insurance markets, either organically or through acquisition.
It has been working on applying for a licence from the Reserve Bank, but has bought Kiwibank's life company, which was owned by the bank's parent company Kiwi Group Holdings (KGH).
KGH is owned by New Zealand Post (53%), the New Zealand Superannuation Fund (25%) and ACC (22%) and owns Kiwi Wealth, Kiwi Insurance and New Zealand Home Loans.
Interestingly, the NZ Super fund is a significant shareholder in Fidelity Life.
Hennin says adding these products to nib's product suite is “...about supporting our members better health and we’re looking forward to providing them access to a suite of health, life and living insurance covers".
nib managing director Mark Fitzgibbon said in a statement to the ASX, "...in New Zealand, living, life and health insurance are complementary products so often purchased as a package".
"We‘re responding to this preference with what should be a more integrated and seamless experience for members and customers. And it means more people will benefit from the investment we’re making in more personalised health risk assessment and management.
"nib NZ had been actively exploring opportunities for some time and was very confident a more comprehensive and integrated offering would enhance market penetration in both health and life products and lift revenues.
"The local living insurance market is twice the size of the health insurance market and has delivered consistent growth over the last decade.
“While in a regulatory sense we distinguish health and life they are both about meeting the needs of people for personal security. Our personalisation strategy or what we’ve dubbed P2P (Payer to Partner), is taking this to another level by offering greater health security in addition to financial security,” he said.
The acquisition represents a significant opportunity for the nib NZ business and will see the immediate addition of around 34,000 new members.
Under the deal, nib will enter into an exclusive relationship with Kiwibank which will see the bank refer its retail customers to nib for their life and living insurance needs.
Kiwibank chief executive Steve Jurkovich says the sale delivers on Kiwibank’s growth strategy by simplifying its business, building the bank’s partnership capabilities, and providing great outcomes for customers.
“Life insurance plays a vital role in providing financial security from the unexpected, and I’m delighted that Kiwibank and nib are entering into a long-term partnership that will support Kiwi to be better off,” he says.
Hennin says in time nib will look to roll out Kiwibank products to its channels, including advisers.
The sale is expected to be completed in early 2022, and requires Reserve Bank approval.
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We reviewed them last month and whilst they are slightly better than the previous Cigna (not ex OnePath) ones labelled Kiwi, they aren't flash.
None of the advisers I know would or could recommend them.