Private health insurer nib has agreed to buy the medical insurance book of Kiwi life insurer OnePath Life for $22.6 million as nib bolsters its presence in the New Zealand market.
The deal, which is subject to regulatory approvals from the Reserve Bank of New Zealand, will take nib’s health insurance coverage to over 200,000 New Zealanders, representing more than 15 per cent of the insured population.
New Zealand has been a tough market for nib. The company finally returned to growth in the number of policyholders in 2014-15 after a decade of decline.
Mark Fitzgibbon, nib managing director, said the purchase follows on from the acquisition of TOWER New Zealand’s medical insurance business in November 2012 and continues his strategy to grow market share in New Zealand.
“The purchase of One Path Life NZ’s medical insurance business meets our strict investment criteria, and importantly provides us with additional scale and scope to grow and leverage our existing New Zealand operations,” he said.
“The purchase also reinforces our commitment to the adviser market, with the majority of the OnePath Life NZ’s medical insurance products being distributed by financial advisers.”
Separately, nib and ANZ New Zealand inked a distribution agreement under which nib will distribute its health insurance products through ANZ’s wealth advisers for a period of five years.
OnePath Life NZ is a wholly-owned subsidiary of ANZ Bank New Zealand and is shifting its focus to the life and disability insurance business.
nib New Zealand boss Rob Hennin said that tapping into ANZ’s wealth adviser network is a big opportunity.
“With around 50 per cent of all health insurance in New Zealand distributed by wealth and financial advisers we expect this relationship to be very successful,” he said.
Mr Hennin said that about 70 per cent of Kiwi’s don’t have health or medical insurance.
OnePath Life NZ is New Zealand’s fifth biggest health insurer with approximately 22,000 policies covering 44,000 lives.
OnePath’s medical insurance book generated gross written premium of $NZ27 million in the 12 months to 30 June 2015.
The deal is not expected to have a material impact on nib’s 2015-16 statutory operating profit.